39% of first time buyers get deposit help from parents

20-Apr-2007

Four in ten of first time buyers have used their parents as a source for their deposit, according to the latest research.

Scottish Widows Bank found that 39 per cent of first time buyers used the bank of mum and dad to fund their deposit, but that this trend could begin to change as more parents look to get their money back.

The research showed that while the percentage of parents willing to give their first time buyer child a monetary gift for their deposit fell from 38 per cent ten years ago to 32 per cent in 2006, the number providing such money as a loan has risen.

In 2006, 18 per cent of parents provided a loan for a deposit, compared with just nine per cent in 1996, Scottish Widows found.

"Even graduates who have been working for several years are forced to borrow money from their friends and family," said Richard Clark, head of product development and marketing at Scottish Widows Bank.

"While it's good to see that people are getting help from their loved ones, some of these loans might be leaving the bank of mum and dad empty."

First time buyers were advised yesterday to act soon if they were thinking of taking out a fixed rate mortgage, with mortgage broker L&C predicting an imminent rise in the Bank of England base rate.

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