Families help fund third of first-time buyer deposits

PARENTS and grandparents are going to ever greater lengths to help children climb on the housing ladder, with the Bank of Mum and Dad working overtime once again during the Covid-19 pandemic.

Entire families are rallying round to help out, including grandparents, siblings and others, according to the latest First Time Buyer Index from Aldermore Bank.

One in three first-time buyers now rely on family help to fund their first property deposit, which is up from one in five a year ago.

Nearly two in five parents are helping out their children by remortgaging their property, while a similar proportion are selling an expensive asset such as a car or holiday home, or releasing equity in their own property.

Others are using cash savings, drawing down money from their pension, selling stocks and shares or even downsizing their home.

There is a real scramble to get on the property ladder, with house prices rising 6.5 per cent in the last year to £254,606, a new record high, according to Halifax.

The average first-time buyer now puts down a £59,000 deposit, around £12,000 more than a year ago.

Aldermore’s head of mortgage distribution Jon Cooper said that homeownership among the young has slumped over the past two decades, due to increasingly high house prices, property shortages and weak wage growth.

He added: “The pandemic has increased the difficulties and family support is now a necessity, rather than just a helping hand.”

He suggested seeking advice from a mortgage broker to discover the best way to help young buyers.