First time buyers are facing difficulty when it comes to raising the deposit needed for their property purchase.  In the case of many homeowner hopefuls they must turn to their Mums and Dads for assistance in meeting their deposit.  According to The Equity Release Council over 228,000 first time buyers received £1.31 billion in assistance from their parents to meet deposit demands.  There was an average of 30% of first time buyers receiving help to meet an average deposit of 20% by lending an individual average amount of £13,000.

This level is a record high for help from family members for first time buyers.  Five years ago the average was £10,000 according to data from the pensions and investment company of Scottish Widows.  In a survey it was revealed that 10% of the children believed their parents had dipped into the retirement savings, 3% remortgaged their own home to help their children climb onto the property ladder, and 8% had delayed their retirement to offer financial assistance.

In another study from HSBC it was shown that many of the parents were expecting their hand-put to be an investment of their funds with their children expected to payback the debt with interest.  Of those polled the survey revealed 73% expected interest with the payback.  Only 31% had given the money as a gift to the relative.

Andrea Rozario, of the Equity Release Council, remarked, “With the average first time buyer putting down a deposit of £27,000 to buy their home, it is unsurprising that people are looking to their parents for help.

“It is concerning that some people are delaying giving up work, using retirement savings or even remortgaging their homes to help their children financially.”