First Time Nerves: Home | Regional Statistics | News Release
FIRST TIME BUYERS' BURDEN FALLS TO UK PARENTS
Spiralling living costs mean today's first time buyers are relying on parental handouts and huge loans to get a foot on the property ladder.
New research from Skipton Building Society, carried out as part of its First Time Nerves campaign, reveals that 20 - 35 year olds looking to buy their first property are turning to their parents for golden goodbyes. A quarter (25%) are counting on their parents to contribute to their deposit and more than one in 10 (12%) hope their parents will put the equity in their own property at risk by guaranteeing their mortgage.
This reliance on the 'bank of mum and dad' is down to their own inability to raise capital. Nearly half (40%) say they struggle to save, with almost a quarter (23%) failing to save any of their income each month. Worryingly, almost a fifth (17%) don't have any money to put down as a deposit.
It seems that the cost of education is partly to blame - 16% say they are having difficulties repaying their student debts while nearly half (44%) admit that they spend too much and save too little.
Many, however, hold the current housing market accountable. Two thirds (66%) say they can't save enough as property prices keep rising. More than half (57%) worry about interest rates rising and being unable to afford mortgage repayments, whilst a similar number (59%) believe property prices will continue to rise.
And it's not just the purchasing market affecting would-be homeowners - the rental market is dwindling their bank balances further. With the majority of respondents renting (87%) while they are looking to buy, the average amount spent on rented accommodation since beginning their property search is £7,682. Among respondents aged 26 - 30, the amount increases to £9,003.
Jennifer Holloway, head of media relations at Skipton Building Society, says, "Faced with industry figures which put the average cost of a house in the UK at nearly £200,000 2 , climbing onto the property ladder must seem as daunting as climbing Everest. Add to that the rising costs of living and renting in the meantime and it's little wonder first time buyers are looking to their parents for financial help. At Skipton, we've certainly seen a rise in the number of parents acting as guarantors on our mortgages, or even going so far as to buy a house with their child.
"The reality is that, if you want to be a homeowner, you have to make the most of the money you have. Our advice for young people is to start saving as early as possible - even if it means forgoing the odd night out or new pair of shoes. A regular savings account is a great idea, especially if you set up a standing order to automatically make payments into it as soon as your salary arrives - you don't miss it as much."
For those who have saved a deposit and have started house hunting, Skipton has designed a website - www.firsttimenerves.co.uk - to make sure they know what to look for, so they buy not just a house but a home. The site includes tips on what to ask sellers and a series of checklists to take to a viewing to make sure nothing is missed.
ENDS
For further information, please contact:
Lisa Pearson, Band & Brown Communications, 020 7419 6934 or lisa.pearson@bbpr.com
Elly Kestenbaum, Band & Brown Communications, 020 7419 7315 or Eleanor@bbpr.com
Editor's notes
- The research was undertaken by PCP using a sample of 500 first time buyers (people considering buying their first property or who have been house-hunting but haven't yet bought a property).
- Data from www.bbc.co.uk , sourced from information supplied by the Land Registry.
- Skipton is the UK 's seventh largest building society, with a national presence represented by its 84 branches, covering the country from Aberdeen to Plymouth . An innovator in the field of mortgage and investment products, the Society stands apart from its counterparts as the parent to 17 subsidiary companies, many of which operate in the financial market.
- Skipton offers range of investment products, including a regular savings account - currently paying 5.30% (including a bonus of 1.50%). Details of this product, along with Skipton's range of mortgages, can be found at www.skipton.co.uk .
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.