Even with family help, first-time buyers need a £36,000 deposit

Even with family help, first-time buyers need a £36,000 deposit

0:04 AM, 9th April 2024, About 3 months ago 1

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First-time buyers in Britain still face a significant financial hurdle despite receiving help from family when it comes to saving for a deposit, research reveals.

The findings from estate agents Yopa found that deposit contributions from the ‘Bank of Mum and Dad and substantial, but still leave buyers needing to save a considerable amount themselves.

The research reveals that the average first-time buyer needs a £35,648 deposit, but family contributions average £25,600.

That’s a £10,048 gap that buyers must bridge on their own.

‘Significant help from generous family members’

The firm’s chief executive, Verona Frankish, said: “It’s no secret that a huge number of first-time buyers are only able to get onto the housing ladder because of significant help from generous family members.

“This has always been the case and the Bank of Mum and Dad helps hundreds of thousands of first-time buyers onto the ladder every year.”

She added: “However, with house prices continuing to climb in recent years, the Bank of Mum and Dad is lending considerably more today than it has previously and even with this contribution, the average first-time buyer is still required to save a hefty sum themselves.”

Burden on first-time buyers varies greatly

The burden on first-time buyers varies greatly depending on location with those in London, for example, needing to save £35,848.

The average property in the capital costs £440,322, and the higher average family contribution of £30,200 is still not enough for buyers.

However, in some regions, family support is more generous and in the North East, the average family contribution of £20,200 is enough to cover the entire deposit for a typical first-time buyer property priced at £134,621.


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Comments

Beaver

15:50 PM, 9th April 2024, About 3 months ago

The other option families have if someone in the family has a buy-to-let and no longer needs it is a concessionary mortgage:

https://www.thisismoney.co.uk/money/mortgageshome/article-12143283/Everything-need-know-concessionary-mortgages.html

https://forums.moneysavingexpert.com/discussion/6418867/help-with-concessionary-mortgage

So if you've had enough with all the bureaucracy of buy-to-let you can get rid of the tenants and pass to the children or to other family members using a concessionary mortgage.

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