Bank of Mum and Dad still major factor in housing market

Twenty percent of millennials now rely on the ‘bank of mum and dad’ to provide deposits compared to just 11% of their parents when they were young.

Research from mortgage lender Together shows how ‘boomer’ parents are forced to take charge to get millennials onto the ladder amid record-high prices with one in five having to move back in with parents to help save for a deposit.

MORE CHALLENGES

And according to IFS over the past 50 years, the average UK price has risen by a startling 158% (even when accounting for inflation), meaning today’s first-time buyers are facing far more challenges than any generation before.

The average age of homeownership for millennials (those aged 28-43) now stands at almost 10 years higher (34 years old vs 27 years old) than when the baby boomer generation (those aged 60-76) were getting on the ladder.

Among the 19% of millennials who’ve managed to get on the ladder, they advise other first-time buyers to ‘hold onto their property and pass it onto younger generations’ – with 60% of millennials aiming to purchase first homes within the next 5-10 years.

Alan Davison, Director of Customer Sales at Together, says: “‘When I was your age, I’d already bought a house’. If a millennial had a pound for every time they had heard this phrase from a parent, relative or older colleague, they’d probably have enough money to purchase a property.”

FISRT STEPS

He adds: “Or, they might if house prices were still at the levels they were in the 1970s and 1980s when their parents took their first steps onto the property ladder.”

“For the baby boomer generation, many of whom would have first bought when the market was very different and arguably easier to access, there is little need for regret.

“This is understandably quite different from millennial first-time buyers today, who are facing an incredibly difficult market stalked by high inflation and looming interest rate decisions.”