Young people looking to buy their first property are struggling to save enough money to put down as an initial deposit. Although house prices are falling, the typical deposit requirement in August was 21%.
35% of parents of young adults aged between 18 and 24 have either given, or are willing to give, up to £10,000 to help their child get on the property ladder. A further 18% would give up to £15,000, according to research from leading mortgage lending company, the Halifax.
The CML paints a similar picture saying that more than 80% of first-time buyers have had to rely on cash from the Bank of Mum and Dad to help them get the necessary deposit. In 2005, just 38% received help from their parents.
The number of approved first time buyer mortgages dropped by 1,000 to 18,300 in August, well below the 35,000 mortgages that were approved at the start of the credit crisis three years ago.
New research from HSBC shows that almost 33% of adults in the UK have savings of less than £250; way below the recommended minimum of £4,683 (3 months average salary). People in the 25 to 34 age bracket are the least prepared; 41% have savings of less than £250 and 25% have nothing set aside at all.
Head of savings at the bank, Richard Brown, said that these findings are worrying and it is extremely important that people put money aside to deal with emergencies.
His comment makes perfect sense. If you are a homeowner and lose your job, how will you meet your next mortgage repayment? 20% of British homeowners say they won’t be able to! Maybe the younger ones will simply turn to Mum and Dad for help…
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