The mortgage lender’s survey found that 1 in 4 (25%) of first-time buyers rely on their parents for financial assistance and nearly two-thirds (64%) of those first-time buyers could not have afforded their property without this cash injection.
And it’s not only first-time buyers who find they need help. 17% of all house buyers receive a cash injection from their family. The majority (55%) of these are under 35.
The trend is particularly noticeable for buyers in the South East, where a third of buyers receive parental help, whereas people in Scotland and Wales are the least likely to need parental assistance when buying a home.
And it looks like men are more likely to go ‘cap in hand’ to their parents than women, with 23% getting help compared with only 15% of women.
Louis Kaszczak, national partnership manager at First Active, said: “Buying a house is a major financial decision for most of us. Making it as affordable as possible is usually top of the list for most first-time buyers, but it can be daunting if you have never done it before. At First Active, we aim to take the hassle out of the mortgage process by offering simple, fair products at competitive rates that start low and stay low. We won’t sting first-time buyers with hidden charges and we can lend up to 95% of the value of a property, making home-owning more affordable”.
However, just because first-time buyers are getting help from their family, it doesn’t mean they are not financially savvy. In many cases they are more aware of the financial issues they face than their elders. 47% of first-time buyers said they planned to remortgage once their initial deal period came to an end. For those not buying their first home, 70% said they were happy to stay put and do not intend to switch at the end of their initial deal period.
Kaszczak continues: “Many homeowners end up on high SVRs (standard variable rates) once their initial deal period finishes because they are not inclined to shop around and switch lenders. First Active’s customers don’t have to worry about that because we offer the same great deals to everyone, regardless of whether they are a new or existing customer, or they can move onto our market-leading long term rate. And, there are no basic legal or valuation fees for those who remortgage to another of our low-cost deals.”
