As many as 23 per cent of first-time buyers in the UK still needs the support of ‘Bank of Mum & Dad’ to step on to the housing ladder, according to a research conducted by specialist bank Aldermore.
Aldermore, in its latest First Time Buyer Index, noted that the majority (54 per cent) of the first-time buyers will use their parents’ cash savings to fund their housing dream. A quarter (24 per cent) will receive equity released from their parents’ property to help fund their deposit for a first home. One in five (19 per cent) say their parents will move house, downsizing in order to support their child.
The latest Index also found that for one in four (26 per cent) first-time buyers, raising a deposit remains the biggest obstacle, as well as difficulties finding an affordable property (25 per cent). Therefore, it is no surprise that more prospective first-time buyers than ever are turning to their family in order to support their dream.
Strawberry Star Group, a London-based property company, is of the view that volume housing is one of the long-term solutions to tackle this growing housing crisis in the UK. There is a need for providing London lifestyle homes at prices achievable for first-time buyers on the UK capital’s commuter belt.
LU2ON, a first-of-its-kind volume housing scheme by Strawberry Star, is coming up in Luton, London’s top commuter belt town. Strawberry Star is planning more such schemes aimed at London-based first-time buyers.
Damian Thompson, Director of Mortgages, Aldermore said: "Young people have had a stark fall in home ownership the past two decades, and with a challenging environment of high house prices, shortage of suitable homes, and weak wage growth this trend will likely not change any time soon. A typical new buyer now needs 18 years to save for a deposit, a striking rise from three years in the mid-90s, meaning the need for the Bank of Mum and Dad to provide support has increasingly become a necessity, rather than just a helping hand."