Not only do many first-time buyers live at home for a considerable time in order to save money, but parents are expected to give generously from their savings to help out financially, and even lend a hand when moving in.
Abbey found that first-time buyers expect their parents to dig deep:
23 per cent of first-time buyers expect their parents to give or loan them money for a deposit
12 per cent expect parents to act as a guarantor on the mortgage
13 per cent expect their parents to pay for furniture or white goods
In terms of where parents get the money from to help their children, Abbey found that two-thirds (63 per cent) of first-time buyers believe that their parents will raid their savings, eight per cent will remortgage and six per cent will use credit cards.
Almost half (45 per cent) of first-time buyers expect their parents to help them when they move into their property and a third (33 per cent) expect that parents will help with DIY and decorating. One in three (30 per cent) even expect parents to accompany them to property viewings.
Jeff Scott, Abbey's head of mortgages, said: "Many first-time buyers need a significant leg-up from parents to have a realistic chance of getting on the property ladder. It is commonplace for parents to take their children back into the family home so that they can save for a deposit, as well as helping them out with cash gifts or loans. Even when their offspring have found a place to buy, parents are still expected to help out on moving day, and with DIY and decorating."
Forty per cent of first-time buyers will live with parents before they buy a property in order to save money, and one in ten (10 per cent) will do so for between a year and two years. A further nine per cent would live at home for over two years.
As a direct result of parents helping out, almost a quarter (24 per cent) of first-time buyers say that they will be required to carry out odd jobs when their parents retire and 18 per cent said they will have to pay back any family loans. Eleven per cent of first-time buyers said that they would allow parents to move in with them when they retire and 6 per cent said that they would pay their retired parents a monthly income.
The situation for first-time buyers is tough. Abbey found that one in three (33 per cent) of first-time buyers would compromise on location or property size if house prices continue to rise. One in four (24 per cent) would take more drastic action and abandon their plans to buy a property altogether; 17 per cent would buy an investment property rather than a home, simply to get on the property ladder.
Abbey believes that whilst parents are part of the solution for many first-time buyers, mortgage lenders can help too, by offering good mortgage deals with features that meet the needs of first-time buyers. Abbey has first-time buyer mortgages with a maximum loan-to-value of 97%, and offers a 'Home Buyer solution'¹ on some of its key fixed rates and variable rate trackers. This offers a free valuation, and assistance towards legal fees, to help reduce to the upfront costs of home ownership. Abbey also offer a cash back mortgage which offers 5% cash back (up to £12,000) upon completion, to provide assistance at an expensive time.
