Bank of Mum & Dad: the only way to get a mortgage?

By Daniel Culpan

According to research, one in five house purchases by first-time buyers last year couldn't have been made without the financial help of parents, as difficult mortgage criteria and high house prices make it hard to get on the property ladder, the Guardian reports.

The report, commissioned by HSBC and carried out by the Centre for Economics and Business Research (CEBR), indicated that when the credit crunch hit - in 2008 - parents helped their offspring get on the ladder by offering loans and gifts and sharing the mortgage, to the tune of £4 billion.

However, in 2011, that figure had increased to a total of £5.3 billion. What's more, during the same period, the percentage of homes that wouldn't have been bought without financial help from family grew from 13% to 19%.

Over the past 12 months, the CEBR interviewed 1,000 first-time buyers - selected completely at random - and found that a third of these said their parents had subsidised the cost of buying their first home.

It also appears that the average value of the financial help given to home buyers differs widely according to age. The research found that while first-time buyers in the 18-26 age group typically received £19,000 worth of help, older buyers could expect an average of £42,200 worth of financial help from their relatives.

Image © Sabphoto - Fotolia

Tags: property, first time buyers, parents, house prices

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