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Survey: Parental financial support key to unlocking first-time buyers’ dreams

Survey data from Barratt Homes reveals that when it comes to first-time buyers, parental financial support is increasingly important*. 53% of first-time buyers intend to go to their parents or grandparents for “some kind of financial support”. Moreover, for 35%, this financial support is for some, or all of their deposit.

Finding funding for the first time

For people trying to take their first step on to the property ladder, funding sources have changed a lot from one generation to another. This is in part due to Government regulations on finance, taxation and inheritance rules. Mortgage lenders have also changed the way financial products are structured over the years in response to the buoyant property market.

The financial foundations of the deposit start at home

An inevitable outcome of these changes has been the increased need for more financial support from the ‘Bank of Mum and Dad’ to help family members secure their first property. This notion is not limited to Millennials alone either. One in five 45-55-year olds have used parental financial support to make a move according to Legal & General’s annual survey.

This financial support is often for the whole deposit itself. Our survey findings show that 35% of first-time buyers ask their family for help in “raising some or all funds for the deposit on a property”.  Research from Halifax indicates the average deposit put down by those buying their first home in the first half of 2018 was 16%.

While the minimum deposit required with new builds on the Help to Buy scheme is 5% of the property value, it is not uncommon to choose to pay a higher lump sum. Doing so can help reduce on-going payments and increase your chances of being accepted for a mortgage with a bank. Help to Buy is also a useful option for reducing the strain on parents who are feeling stretched when it comes to providing a deposit for loved ones.

Barratt Homes offer extra help to make buying your first home more affordable

We have a variety of schemes available to help first-time buyers move into their first home. From Help to Buy, which lets you buy with just a 5% deposit to Deposit Match, ask a mortgage adviser to help guide you and your financial circumstances.

Explore the Barratt Homes range of schemes available today.


*A survey of 269 adults planning to become first time buyers, conducted by independent market research agency Walnut Unlimited in December 2018

 
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