First-time buyers expect parental assistance

First-time buyers take it for granted that they will get parental assistance in order to get onto the property ladder, reveals research from Abbey.

Not only do many first-time buyers live at home for a considerable time in order to save money, but parents are expected to give generously from their savings to help out financially, and even lend a hand when moving in.

Abbey found that first-time buyers expect their parents to dig deep, with 23% expecting their parents to give or loan them money for a deposit.

12% expect parents to act as a guarantor on the mortgage and 13% expect their parents to pay for furniture or white goods.

In terms of where parents get the money from to help their children, Abbey found that 63% of first-time buyers believe that their parents will raid their savings, 8% will remortgage and 6% will use credit cards.

45% of first-time buyers expect their parents to help them when they move into their property and 33% expect that parents will help with DIY and decorating.

One in three even expect parents to accompany them to property viewings.

Jeff Scott, head of mortgages at Abbey, says: Many first-time buyers need a significant leg-up from parents to have a realistic chance of getting on the property ladder.

It is commonplace for parents to take their children back into the family home so that they can save for a deposit, as well as helping them out with cash gifts or loans.

Even when their offspring have found a place to buy, parents are still expected to help out on moving day, and with DIY and decorating.

40% of first-time buyers will live with parents before they buy a property in order to save money, and 10% will do so for between a year and two years, and a further 9% would live at home for over two years.

As a direct result of parents helping out, 24% of first-time buyers say that they will be required to carry out odd jobs when their parents retire and 18% said they will have to pay back any family loans.

11% of first-time buyers said that they would allow parents to move in with them when they retire and 6% said that they would pay their retired parents a monthly income.

Abbey found that 33% of first-time buyers would compromise on location or property size if house prices continue to rise.

One in four would take more drastic action and abandon their plans to buy a property altogether, and 17% would buy an investment property rather than a home, simply to get on the property ladder.

Abbey believes that whilst parents are part of the solution for many first-time buyers, mortgage lenders can help too, by offering good mortgage deals with features that meet the needs of first-time buyers.