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Half of parents want to help kids buy a home

Half of parents want to help kids buy a home
Christina Hoghton
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Christina Hoghton

The Bank of Mum and Dad now comes with feelings of guilt if you can't offer as much financial support as you'd like.

According to the Homeowners Alliance, 50% of homeowning parents with adult children who do not own their home said they wish they could provide more financial support.

Six in 10 worry about their children’s chances of owning in the future.

And a quarter admit they feel guilty about not being able to provide more support.

Parental expectations

More than half (54%) of parents with adult children have either helped or expect to help their children with financial support to buy a home.

Below are the ways they expect to financially support them.

Inheritance – 26%
Gifted deposit – 17%
Live rent-free at home – 10%
Loaning money – 9%
Paying for child’s living costs – 7%
Downsizing their home – 3%
Guarantor on mortgage – 3%
Buying a home – 3%
Equity release – 2%

Worryingly, 56% expect that helping their children to buy a home will impact their lives and directly affect their own financial position.

Some will need to work longer, dip into savings or say they won’t have the money to fund their own long-term care if needed.

Paula Higgins, chief executive of the Homeowners Alliance, said: “While we all know that the Bank of Mum and Dad is supporting many people’s first steps onto the housing ladder, what our survey shows is the emotional and financial strain it puts on families in today’s Britain.

“Parents with adult children understand the importance of homeownership but are overwhelmingly worried, want to help more and feel guilty they can’t.

“Beyond the emotional burden, there is a worrying picture emerging of the impact this is having on older parents’ life. Our survey finds that many people are worried that helping may leave them financially short. And one in 10 may even delay their retirement and work longer into old age in order to help their child buy a house.”

Jim Boyd, chief executive of the Equity Release Council, added: “The harsh reality is that, despite various different schemes designed to support first-time buyers, homeownership remains a pipe dream for many.

“Short-term cost-of-living pressures and longer-term generational shifts are impacting everything from day-to-day spending through to savings and paying for care in later life. It’s no surprise parents and grandparents want to help loved ones onto the property ladder, but there can be emotional as well as financial consequences.

“We know homeowners are increasingly making use of equity release to unlock wealth from their homes to benefit family members, as well as boost their own standard of living. With the trend towards providing a ‘pre-inheritance’ only likely to grow, these types of conversations need to become more commonplace and less taboo.”

Related: A fifth of first-time buyers are 40+, Santander says