Parents providing help to many first time buyers

Recent figures have shown that an increasing number of first time buyers in the UK are getting financial assistance from their parents, and that without this financial assistance many would be unable to get onto the property ladder due to financial constraints in the current difficult financial climate.

It is thought that around half of first time buyers aged thirty and under are getting financial assistance from their parents, and this has risen from around 38 percent of first time buyers in this age group getting help from their parents last year. However, there are concerns that the recession and job losses could mean that many parents are no longer able to help their kids out with getting onto the property ladder.

The highest level of assistance was needed in the London area according to reports, and the Council of Mortgage Lenders stated: “In London, the typical assisted first-time buyer had a £67,000 deposit and an average income of £42,000. In very stark contrast, unassisted buyers in the capital had a typical deposit less than a third of this size – just £19,000 – but typically need a much higher income of £57,000.”

It also said: “In the current market environment, 100% mortgages are not so widely available. Many lenders typically require a higher deposit from borrowers than before. So even though the total needed to buy a house is declining, first-time buyers are facing a new affordability challenge in the shape of a higher deposit required by lenders.”