Parents spend over £20 billion a year supporting their adult kids
The first-time buyer burden on parents is a cool £20.1bn according to Aldermore, which worked out the annual cost of supporting children who want to buy their first property.
More than one in five (22%) aspiring first-time buyers live with their parents and a quarter (26%) admit they will have to do so for at least another five years to save for a deposit. This situation is unlikely to get better as almost a third (31%) strongly agree that buying a home is unachievable for them at the moment (a sentiment which is consistent quarter on quarter).
This has hiked parents’ outgoings by an average of £4,996 a year in food, electricity and petrol. For those whose children have to live with them for five years, it would total around £24,979. As a result, a third have had to sacrifice saving for retirement in order to support their kids.
Government help needed
When asked what the new Government should do to better support first-time buyers, a quarter of respondents said it should address rising house prices, and this figure increased to almost a third in London.
One in 10 reckon that building more homes is the priority.
Charles McDowell, Aldermore’s commercial director of mortgages, said: “First-time buyers have a notoriously difficult time getting on the property ladder. Since saving an adequate deposit remains the biggest obstacle, more and more people have had to move back into the family home to boost their savings.
“Our report reveals just how difficult this can be to navigate, with real impact not just on parents finances but also on the relationship with their children and their own ability to save. Furthermore, as parents are less able to save for their retirement, more people will require help to unlock the value held within their property in later life. This is an intergenerational problem that goes beyond the simple view of the Bank of Mum and Dad.”