You are here: Home - Mortgages - First Time Buyer - News -

Half of first-time buyer deposits come from family members

0
Written by: Christina Hoghton
13/04/2017
Whether it's the Bank of Mum and Dad or the Bank of the Grandparents, first-time buyers are getting a helping hand onto the ladder.

More than half of first-time buyers depend on members of their family to help them amass enough money for a deposit on their first home, said Nationwide.

It revealed that nearly a third of first-time buyers said they would get money from the Bank of Mum and Dad, while 8% were reliant on other relatives, such as grandparents. Another 15% said that funds from an inheritance would be used for a deposit on a property.

Lack of knowledge

The research also revealed some startling misconceptions about what can be used as a home deposit.

While two thirds (63%) said they were active savers into savings accounts, with a quarter (26%) specifically identifying the Help to Buy ISA as their savings vehicle of choice, a significant proportion thought they could use a personal loan (10%) or credit cards (5%) to fund a deposit.

This is despite the fact that unsecured borrowing for this purpose could potentially damage their chances of securing a mortgage.

Matt Smith, Nationwide’s head of product management for mortgages, said: “The research bears out what we know – that raising a deposit, particularly as a would-be first time buyer, is often the biggest barrier to owning a home, and that family support can be vital to enabling them to take those first steps.

“It’s also clear that while the majority know how important saving for a deposit on a home may be, very often it’s extremely difficult to achieve without family support. However, they should never rely on borrowing to fund their deposit, such as credit cards or personal loans.”

See YourMoney.com’s Help your kids buy a house without handing over stacks of cash.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2256228-keys1
How to bag a Kensington flat rent-free for a year

A bank is giving a young professional the chance to live in a Kensington penthouse apartment rent-free for a year.

Close