Could you be waving goodbye to a much-loved second home for THIS surprise reason?

Holding on to that pied-à-terre on the continent may become a distant dream...

Drawing on the Bank of Mum and Dad for financial support isn’t a new phenomenon. But with the rising cost of buying a home, many first-time buyers are faced with making a least one big withdrawal from this ‘institution’.

Help for first-time buyers: First-time home buyer guide – how to get on the property ladder for the first time

And now new research has revealed the heavy price parents are paying to help their children get a foothold on the property ladder.

bank mum dad property ladder

Image credit: Simon Scarboro

The first-time buyer index from retail bank Aldermore showed that parents are prepared to sacrifice their own home comforts and their retirement funds in order to give their offspring a place they can call their own.

Almost a quarter (23 per cent) of survey respondents admitted then they will ask their parents/family members to assist them in putting together a house deposit. And when asked how their ‘lenders’ would be able to do this the results were as follows:

bank mum dad property ladder

Image credit: David Brittain

  1. They will use their cash savings — 54 per cent
  2. They will release equity in their property — 24 per cent
  3. They will move and downsize — 19 per cent
  4. They will remortgage their property — 17 per cent
  5. They will take a cash lump sum from their pensions — 6 per cent
  6.  They will sell their second property — 4 per cent

Commenting on the findings, Damian Thompson, Director of Mortgages, Aldermore said: ‘Young people have had a stark fall in home ownership the past two decades, and with a challenging environment of high house prices, shortage of suitable homes, and weak wage growth this trend will likely not change any time soon.

bank mum dad property ladder

Image credit: Brett Charles

‘A typical new buyer now needs 18 years to save for a deposit, a striking rise from three years in the mid-90s, meaning the need for the Bank of Mum and Dad to provide support has increasingly become a necessity, rather than just a helping hand.’

Releasing money from you home: Equity release – a guide to accessing the cash tied up in your home

Do the research findings ring true for you?

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