Every Quote Is Free & Confidential  Children relying on Bank of Mum and Dad, even on property ladder |
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Video transcript
Buyers looking to get on the second step of the property ladder are turning to their parents, according to new research in late 2015.It`s not just first-time buyers that look to their parents for help getting a foot on the property ladder, as those who looking to climb further up are still relying on the Bank of Mum and Dad.
This is according to research from Lloyds, which reveals that almost one fifth of homeowners trying to take their second step on the housing ladder will consider asking friends or family to dig deep to help fund the move, as the cost of trading up continues to rise rapidly.
The latest estimates show that people living in their first home need to find more than £125,000 to fill the gap between the sale price of their current property and the cost of the house they want to move into, which is typically a detached
house. If the `second stepper` wants to buy a semi-detached property, the gap drops to just over £17,000.
Meanwhile, research also reveals that the size of the deposit needed to secure the mortgage for the new property is seen as the biggest barrier to moving by 44 per cent of second-time buyers.
Almost three in four intend to release equity from their current home to raise the necessary deposit, while more than half will raid their savings and over one in ten will consider asking family and friends for financial help.
The average figure second steppers will ask their family to contribute is £22,480, up from £21,080 in 2014 and £21,273 in 2013. Half of those who will turn to family feel that they wouldn`t be able to get on the next rung of the property ladder without this financial assistance.
Of those who asked mum and dad for help, four in ten admit that their parents had to make sacrifices to help them move further up the ladder, down from 70 per cent in 2013. One in five said they will have to have children later in their lives because of the challenges attached to moving for second time.
Andrew Mason, Lloyds Bank mortgages director, believes that `parental support has been playing an important role in helping young people get on the property ladder for decades but this is being stretched further` as second steppers turn to mum and dad again.
However, many are trying to go it alone by overpaying on their current mortgage and increasing the amount of money they put into their savings each month.
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