"Dipping into cash savings has long been commonplace for parents helping their children but they are beginning to feel the pinch when it comes to this support. "
- Jon Cooper, director of mortgages at Aldermore
Parents are having to withdraw financial support set aside to help their children secure a home because of high living costs, according to new research from Aldermore.
The survey found that 59% of all first-time buyers have seen their family scale back or remove support altogether.
One in five (19%) prospective first-time buyers expect their loved ones to pay approximately half of their overall deposit (approx. £24,790).
Although the most common way families assist in raising a deposit is by gifting cash savings (57%), the research revealed that parents are also making great sacrifices to help out, with 16% selling a second property, 15% downsizing their main property, 17% taking lump sums from their pensions and 9% remortgaging their property. However, nearly one in 10 (8%) prospective first-time buyers are unaware how their family members are funding the money to help them bridge the gap.
Parents are also taking extra steps to help their children save towards their deposit. One in six (18%) prospective first-time buyers live with their parents rent free in the run up to buying their first home.
Jon Cooper, director of mortgages at Aldermore, said: “The Bank of Mum and Dad has become a fixture of homebuying in the UK. Dipping into cash savings has long been commonplace for parents helping their children but they are beginning to feel the pinch when it comes to this support.
"While gifting to children is admirable, it’s important that families don’t overextend themselves or compromise their own finances in providing support to their children."
