Four in 10 parents can’t help their child onto the property ladder
The Bank of Mum and Dad is well and truly open for business, but 41% of parents are not in a position to provide any financial support to help their child on the property ladder.
Post Office Money found that six in 10 parents can afford to make a financial contribution to help their children buy their first home. However only 5% can pay for the full deposit.
It’s not just the mortgage they help with – 61% parents are also helping their children financially through other means, such as rent-free accommodation and free childcare.
This sort of parental financial assistance can halve the time it takes for millennial first-time buyers to save for a deposit, as most can only save 7% of their income towards a deposit.
Wealthy and wise
According to the lender, the parents of millennials have an average financial wealth of £52,746 (£70,704 in London). If they choose to assist their child’s home purchase, on average they can afford to use a third (35%) of this wealth – equivalent to £18,396 (a third of the average deposit for a first-time buyer in the UK).
Four in five (81%) parents surveyed are more than happy to provide financial support if they can.
However, many parents do not feel they can provide their children with financial help. Only one in 20 (5%) say they can afford to make a financial contribution to the value of £50,000 or more, which is equivalent to the average UK deposit for first-time buyers.
Owen Woodley, managing director of Post Office Money, said: “For reasons beyond their control, the vast majority of the younger generation will need help and we can see that parents are doing all they can to support their children. 59% of parents we spoke to are able to make a financial contribution and many supported their children’s saving in other ways.
“However, only 5% of parents were able to provide the full amount required for a deposit and so first-time buyers are still having to work hard to make their dream a reality.”