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Would-be homeowners hoping to get a foot on Britain’s property ladder are growing increasingly reliant on their parents for financial help, a new study suggests.
Research from the Social Mobility Commission has found that more than a third (34.1 per cent) of first-time buyers now rely on a loan from the so-called ‘bank of mum and dad’ to help them purchase their first home. This is up from a figure of just 20 per cent recorded in 2010/11.
Furthermore, researchers found that ten per cent of first-time homeowners now rely on inherited wealth to help fund their purchase.
Study author, Dr Paul Sanderson of Anglia Ruskin University, said: “Affordability problems mean that parents and other family members have a critical role in assisting their children to buy their first home, either by means of a gift of money or a soft loan”.
The comments echo separate research recently published by insurer Legal and General, which found that a quarter of all UK mortgages approved in 2016 were partially funded by borrowers’ parents.
Dr Sanderson added: “Going forward, the gap is likely to continue between those in the UK who can acquire that most significant of financial assets, the family home, and those who cannot.
“Only better-off young people and those who have parents who have already accumulated housing wealth are likely to be able to consider home-ownership without radical changes to the housing market,” he said.