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Bank of Mum and Dad failing first-time buyers

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Half of aspiring homebuyers need family help

Half of would-be first-time buyers and a quarter of current home owners believe it would be impossible to buy a new home without the help of ‘the Bank of Mum and Dad’, a YouGov survey by the Council of Mortgage Lenders has revealed.

However, 29% of first-time buyers and 12% of homeowners do not anticipate any help with their ambitions.

The CML stated: “The fact that an increased reliance on the Bank of Mum and Dad over recent years has, until recently, gone hand in hand with sharply reduced numbers, illustrates that there are material limits to how much parental help can deliver, both in terms of how many parents are in a position where they can offer help and the depth of their pockets.

“Potentially, this is where Help to Buy might come in. While at this stage the policy remains rather sketchy in detail, it does in principle have the potential to ease some of the expectations and pressures on the Bank of Mum and Dad, extend the range of circumstances where more modest financial help can still be of practical worth, and enable more households to get on to the housing ladder under their own steam.”

Insufficient savings was the most commonly cited reason for not being able to buy a home, according to survey.

But a lack of funds did not prevent all of those aspiring to own their own home from becoming first-time buyers – the study found 32% of this group expected not to need help in order to buy. Meanwhile, roughly half of existing home owners and first-time buyers who could safely rely on parental help saw themselves as likely to be able to buy.

Those who wanted to buy within the next two to three years were also more optimistic than respondents generally about Help to Buy, with nearly half welcoming the opportunity to take out a mortgage with a lower deposit and 59% of potential first-time buyers saying it would improve their chances.

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