Over half of first-time homeowners under the age of 35 had financial help from the “bank of mum and dad”, research from Legal and General has found.
According to new data from the financial services group, which questioned 1,985 recent homeowners or prospective homeowners, 56 percent of young, first-time buyers used money from their parents to help buy a property. Almost three-quarters said that they would not have been able to buy a house without this financial help – equivalent to 71 percent.
The average amount borrowed by under-35s from their parents is £19,000, according to Legal and General, with 21 percent of respondents saying that they borrowed £30,000 or more. In 2020, these contributions totalled to £1.36 billion, aiding the purchase of £18.11 billion worth of property.
The number of people purchasing property with financial help from parents is high – totalling 73,160 properties in 2020 – but it is a decrease on 2019, when parents assisted with the purchase of 79,631 properties. However, this is a smaller than expected drop when considering the impact of coronavirus on the property market.
Eddie*, 33, decided to buy a house this year to take advantage of the stamp duty holiday, a measure introduced by chancellor Rishi Sunak to help boost the housing market during the pandemic. Eddie was able to purchase a four-bed in Tunbridge Wells with the help of his parents, who lent him and his partner £20,000.
“[I’m] super grateful,” says Eddie. “I started working for myself a few years ago so it’s been hard work getting the deposit together ourselves.”
Kia*, 24, also chose to buy a house this year in London using money saved from working and living at home, as well as £60,000 from family: £40,000 of which came from her parents, and £20,000 from her grandparents.
“Even with the mortgage itself, due to my salary being too low, it’s going to be joint with my dad so we can borrow more,” explains Kia. “I think that I would only be able to afford my own place in a few decades time if not for my parents’ help.”
She continues: “I’ve told very few people about it. I know I should just own my privilege, but it’s one of those things where you’re just never not going to look like a bit of a dick or spoiled brat. That said, given that my grandma emigrated to the UK in the 60s and neither of my parents were raised over here, I do feel a weird sense of pride that they have the ability to do this for me.”
*Names have been changed.