With recent housing shortages and a lack of financial input, more and more mums and dads are having to bail out their children when it comes to getting on the housing market.
Studies show that a quarter of homebuyers over the UK have only purchased their homes with loans or handouts help from their parents. Whether the bank of mum and dad is open for business or not, many parents are having to help their children more and more to even get on the property ladder let alone own a property completely themselves.
Millennials Are Struggling
Like we have said before and the news is high on talking about right now, millennials are struggling financially and with the job market also. With many students graduating and not enough jobs for them to land in, many are working part-time in industries nothing to do with their skills just to earn a living. With this living not being enough to buy a house, many are either renting or still at home in their parent’s abode.
“The research estimated that parents will provide deposits for more than 300,000 mortgages. The homes purchased will be worth £77bn and the average contribution is £17,500, or 7% of the average purchase price”, The Guardian.
With most of those struggling being at millennials age and aged under 30, the bank of mum and dad has never seen so much action.
Blocks In The Road
As well as a housing shortage it is becoming common knowledge that young adults are receiving help from their parents rather than the top lending companies. By doing this the bank of mum and dad are quickly landing themselves a spot in the top ten lending institutions through no choice of their own and through the desire to just help their family out.
Reports show that this is the second year the bank of mum and dad have been in action when it comes to property and is showing that the housing market clearly isn’t working how it should. Rather than encouraging first-time buyers to get on the market, they are being pushed out indirectly through lack of finance and secure job roles.
“The intergenerational inequality that creates the demand for [parental] funding continues to widen – younger people today don’t have the same opportunities that the baby boomers had, including affordable housing, defined benefit pensions and free university education”, The Guardian.
The UK is currently experiencing a serious lack of housing and the property market is seeing less action than ever before. The volume of transactions has dropped dramatically and with parental funding rising, it is clear that first-time buyers aren’t actually first-time buyers anymore.
I understand that all parents want to help out their children, but by doing this the property market is slowly declining. There needs to be something done by the government to fix this issue before we see more and more millennials fall into the trap of poor housing supplies, high-interest rates and no income to save a deposit.
Get in Touch
If you are looking for assistance throughout your property transactions, call me today on 01983 731 198 or 07866 041 533. Providing building services, inspections and property surveys, you can rely on me over the Isle of Wight to make sure you are secure on the property market with a property you can trust.