FTBs ‘Heavily Reliant’ On Parents To Get Onto Property Ladder

First-time buyers (FTBs) in the UK are struggling to take that first all-important step onto the property ladder, with many of them now relying on their parents and the bank of mum and dad in order to own their first home.

This is according to new analysis from the Social Mobility Commission, revealing that homeownership for those aged between 25 and 29 has fallen by more than half in the last 25 years, dropping from 63 per cent in 1990 to 31 per cent now. It is important to note as well that many of these people who do eventually get on the property ladder are only able to do so at an older age.

The study found that 34 per cent of FTBs in England have to turn to a family member for a loan or financial gift so they can buy their first house, compared to 20 per cent seven years ago. An additional one in ten also rely on inherited wealth – and 12 per cent of existing homeowners also need to benefit from a loan or gift from their parents when purchasing a new house.

Chair of the Commission the Rt Hon Alan Milburn had this to say on the matter: “Homeownership helps unlock high levels of social mobility but it is in free-fall among young families. Owning a home is becoming a distant dream for millions of young people on low incomes who do not have the luxury of relying on the bank of mum and dad to give them a foot up on the housing ladder.”

He went on to note that social mobility is being impeded and inequality exacerbated by the way that the housing market is operated – but the government has now recognised the increasing problem that people now face in taking that step onto the property ladder, which is welcome. However, it’s important to increase opportunities for homeownership, which will require “radical action” nationally for the housing supply.

However, it may be worth noting that previous research from Connells Survey & Valuation revealed that FTB activity in the UK climbed to its highest rate in five years recently, making up more than a third of overall activity.

It was found that FTBs actually dominated the property scene last month (February) accounting for 36 per cent of all purchasing activity, the highest that’s been recorded in this section of the market since July 2011. The rise was put down to the near-zero base rate, which has kept mortgages affordable, with gross lending peaking at its highest level since 2008.

These are all very encouraging signs for FTBs, whether they need to rely on parental assistance or not. At the very least, it must be nice for FTBs to learn that they’re certainly not alone if they do need cash help from their parents in order to buy these days.

For letting agents in Seaham, call us at Dowen today.