Parents funding first time buyer flight

29-Aug-2007

Parents of potential first time buyers give their children a helping hand to the tune of £21,314 in order to help them purchase their first home, new research has revealed.

A study from Alliance & Leicester Mortgages has found that this figure is £3,637 higher than it was a year ago, with a third of all parents saying that guilt would be a problem if they were not able to contribute any funds.

Buy-to-let was also on the minds of many parents, with one in ten saying they would look to rent a home to their children.

"It has become increasingly common for parents to offer financial assistance to their children when they come to buy their first home," commented Alliance & Leicester director of mortgages Stephen Leonard.

"Rising house prices mean first time buyers have to find bigger deposits to secure their property, with many having to fork out for stamp duty as well," Mr Leonard added.

Over half of all first time buyers now receive financial assistance from their family, a recent report from GE Money Home Lending revealed.

"Parents who more often than not have the means to help their children should go ahead and do so," commented Helen Adams, managing director of first time buyers' online advice centre FirstRungNow.com

"There are a huge number of ways that parents can help without breaking the bank but they may need to take tax and legal advice as well as financial advice," Ms Adams concluded.

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