3 June, 2016
Although buying property will always be a big deal, it's a particularly daunting undertaking for first-timers. Traditional mortgages have been difficult for youngsters to obtain in recent years, and the pressure to source big deposits has pushed many into seeking significant financial boosts from elsewhere.
The first option on most lists? Parents, of course.
An important part to play
Unlike most high-street lenders, the so-called Bank of Mum and Dad has a great reputation. It offers flexible, interest-free agreements that can be adjusted as and when to account for life's unexpected hurdles.
Due to its undeniable selling points, parental support has for decades played a crucial role in keeping the industry moving; helping young people reach that first step on the ladder. But what's the situation now?
Well, there's little sign of change. Recent research from financial services firm Legal & General predicts parents will provide more than £5 billion towards homes and mortgages in 2016; some lending and others donating.
They'll provide deposits for more than 300,000 mortgages, and assist their kids in buying homes worth a whopping £77 billion. With financial involvement in a quarter of all property transactions this year, parents will break into the list of the UK's top ten mortgage lenders. It's serious stuff.
This help isn't available to everyone, of course, but for those whose parents are in comfortable enough position, the average first loan is around £24,000, according to a study carried out by Lloyds TSB. Unfortunately for Mum and Dad, the generosity doesn't always end there.
Around one in five movers turn to their family for help taking their second step on the ladder too, with most asking for around £22,000 to get them into bigger homes or to nicer locations. There's no research that covers third-time buyers just yet but with prices rising it may well come.
Helping in other ways
Many parents are still on hand to help their young ones even when they don't have the money to give. Situated next door to the bank is the Hotel of Mum and Dad, a place where an increasing number of 'children' in their 20s are choosing to stay while they save.
According to a survey carried out by building society Nationwide, a fifth of young adults are living at home with their parents until they are at least 26 - with 20 per cent of these paying nothing in rent. While not all will be using their time at home wisely, 28 per cent of those questioned said they were saving for a deposit. It's a great break if you can get it.
Looking to the future
The average age of the first-time buyer has certainly crept up in recent years: in 2015 it was 2013, having risen from 31 just ten years' previous. That said, work is being done to get more young people on the ladder. The government has been working hard not only to increase the amount of affordable housing on the market, but also to make it easier for new buyers to get mortgages in the first place.
With this in mind, the reliance young people have on their parents could well decrease in the coming years. Time will tell.