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Parent shelling out to help first time buyers onto the ladder

With soaring property values becoming more and more exorbitant for first time house buyers attempting to get themselves onto that tricky first rung of the property ladder it seems that a considerable share of the financial responsibility is resting squarely on the shoulders of first time home buyer's parents.


According to a study by Alliance & Leicester Mortgages parents are paying on average £21,314 to help their kids buy that awkward first home (the cost of which now averages £162,055). With the much-documented upward spiral of house-prices and the high probability of sizeable student debts it would seem that for a growing number of home-buyers the only way of getting on the ladder is by seeking the help of their parents.


One in five of the parents surveyed had already helped shoulder the financial burden of their children's first home and another 20% intend to help when their children need their help. The report also shows that parents are willing to contribute more money than ever - the average figure has gone up £3,637 on last year's average figure of £17,677.It looks like being a parent is more expensive than ever before.


Why are today's parents seemingly so openhanded with their money? The study appears to indicate that guilt plays a big part - more than one in three say they'd feel guilty if they weren't able to contribute (interestingly fathers experience this guilty burden more than mothers with almost half of them seeing it as their responsibility to assist the children.)


Interestingly there appears to be something of a disparity between the number of parents willing to help out their kids when it comes to buying a first home and the proportion of their first-time buyer children who are or have been ready to request for their parent's financial aid (18%). A tenth was willing to ask their grandparents for assistance if their parents weren't able to help.


Stephen Leonard, Director of Mortgages at A&L commented: "It has become increasingly common for parents to offer financial assistance to their children when they come to buy their first home. Rising house prices mean first time buyers have to find bigger deposits to secure their property, with many having to fork out for stamp duty as well. This means extra funding from parents can often make the difference between renting or being able to get on to that first rung of the property ladder."


Go to the A&L site for more information on A&L Mortgages. For house insurance try RIAS.


 

 

 

 

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