Half of first-time buyers are helped by parents or grandparents
Nearly half of first-time buyers are partially helped to raise a deposit by parents or grandparents, a study by Key has discovered.
Adviser firm Key asked a series of questions to 150 brokers during July and August 2019.
The advisers estimated that 47 per cent of first-time buyers (FTBs) were partially helped by parents or grandparents with a deposit, compared to 33 per cent who managed it alone.
And they thought that 24 per cent of second-home buyers were helped by parents or grandparents.
Brokers were asked: “Thinking about older borrowers who have children or grandchildren, have you spoken to any of them about the following?”
In reply, 19 per cent said they’d had enquiries about selling buy to let and holiday homes, 32 per cent indicated they’d been asked about acting as a guarantor, 28 per cent were asked about remortgaging and 21 per cent had received queries about taking on a new mortgage.
Asked if they expected to see an increase in FTB equities over the coming year, 60 per cent of brokers agreed.
“Advisers foresee a surge in first-time buyer enquiries. The average FTB has to find £25,000 to secure a good rate, so it’s not surprising that parents and grandparents are increasingly playing a role,” said William Hale, chief executive at Key.
He added: “Older generations are using savings or pensions to help fund deposits and that could have a sting in the tail.
“It’s important to ensure that over-55s make decisions that will benefit them and their families over the long-term and that they get specialist advice that covers all the options including equity release.”