Almost a third of would-be buyers move back in with parents, report says
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Version 0 of 1. Growing numbers of would-be first-time buyers are moving back in with their parents, despite record low mortgage rates and an increasing availability of mortgages for those with small deposits, according to research by Halifax. The data from its latest Generation Rent report also showed a big divide between the help available to first-time buyers whose parents own a property and those whose family are in rented accommodation. The research, based on 1,000 parents of 20- to 45-year-olds, showed that 28% had welcomed their offspring back into the family home, compared with 24% in 2012. Related: Biggest monthly rise in UK mortgage approvals since 2009 Parents are also helping younger buyers on to the ladder in other ways, with 26% saying they had contributed to a deposit, and 21% contributing to other costs associated with moving home. Small numbers had acted as guarantor, the house bought with or for a child, or contributed to monthly mortgage repayments. Banks and building societies have become increasingly willing to offer loans to those with small deposits, and a mortgage price war has bought rates down, even on large mortgages. Last week, official figures showed that almost 94,000 people had used the government’s Help to Buy scheme designed to help those with small deposits since its launch in 2013, 80% of whom were first-time buyers. However, rising house prices in some parts of the country mean unassisted homeownership is still out of reach for many buyers. Figures from mortgage lenders for 2014 showed half of buyers had help with a deposit from someone. Among parents who owned a property, 57% told Halifax they had contributed, or were planning to contribute, to their child’s deposit, compared with 24% of parents who rented. Alongside this, 24% of parents who owned said they were, or planned to be, a guarantor on a mortgage, compared with just 7% of those in rented homes. Halifax said the difference in help available from parents of different housing tenures “clearly emphasises the importance of property ownership for the prosperity of future generations”. Betsy Dillner, director of the lobby group Generation Rent, said this trend could make society “even more unequal”. “It’s not surprising that renters are less able to help their kids buy a house than homeowners – it is much harder to amass savings when you’re paying off someone else’s mortgage instead of your own,” she said. It is much harder to amass savings when you’re paying off someone else’s mortgage instead of your own “If homeownership becomes the preserve of children of the already well-off, this will stamp out social mobility and make society even more unequal. Policymakers must start reforming the rental market so those stuck in it can enjoy a quality of life to rival homeowners.” Halifax also asked more than 8,000 20- to 45-year-olds, and their parents, how difficult they thought it was for first-time buyers to get a mortgage. While just 12% of parents agreed that it was “virtually impossible”, among prospective homeowners the figure was 21%. |