Family bank’s £3,000 for children

Parents and grandparents have to dig deep to fund first-time buyer deposit

Parents and grandparents face putting away more than £3,000 per year typically to help children on to the property ladder in adulthood, according to calculations.

A child born now would need average annual contributions of £3,129 into their Junior Isa (Jisa) to afford the average UK first-time buyer deposit once they reach the age of 18, according to financial adviser, Quilter.

In London, they would need £7,120 annually.

The research assumed that the average first-time buyer deposit, at £57,278 in 2020, increases by 2% each year.

It also assumed a 4% return on savings.

Heather Owen, financial planning expert at Quilter, said: “The average amount put into Jisas was just over £1,000 in 2019/20, but a child born today will need contributions worth over three times that amount, or £3,129 each and every year for 18 years in order to generate a pot big enough to afford a deposit when they reach adulthood.

“Parents and grandparents will be assisted by the fact that Jisas have become significantly more generous, and the subscription limit stands at £9,000, but many parents and grandparents will underestimate just how much is required to support their child or grandchild become a homeowner.”

Quilter analysed Halifax first-time buyer data to make the findings.

■ More overseas investors could be poised to enter the UK property market following the disruption caused by the coronavirus pandemic, figures from an estate agent suggest.

Knight Frank said its web traffic data showed nearly a quarter (24%) of users looking at sales and lettings properties in August were based abroad. This was the highest number since its figures started in January 2020. The average proportion in the 18 months to June was 17%.

The number of international web users looking at lettings properties in August also exceeded those based in the UK for the first time since the start of 2020.

Demand has been driven by overseas students acting before the start of the academic year and returning corporate tenants as offices reopen, Knight Frank said.