First-time buyers relying on help from grandparents

New research by Opinium, on behalf of Santander, has revealed that there has been a fourfold increase in the number of first-time-buyers who are relying on help from their grandparents to get on the property ladder in the last five years.

According to the research, over the past five years there has been a large shift towards turning to family for help in order to get a foot on the property ladder. Of those currently looking to buy, 32 per cent will use a family loan to help with the deposit, a sharp increase from the 13 per cent of current homeowners who asked for financial help from their families.

The study, which took a snapshot of FTB attitudes towards the property market, revealed that FTBs estimate their deposit will be, on average, 32 per cent of their salary. However, a significant one in five (19 per cent) expects to pay more than half of their annual income on their deposit.

In comparison, current homeowners estimated that when they bought their first home, their deposit was an average of 20 per cent of their yearly income, with only five per cent of them spending more than half of their salary on a deposit.

The research also reveals a sizeable imbalance when it comes to home deposits and gender. Almost a quarter (23 per cent) of women expect to spend more than half of their annual salary on their deposit. This compares to just 14 per cent of men who expect to spend the same proportion of their salary.

Despite the extra help from family members, FTBs saving for a deposit expect to do so for an average of five years. A whole year longer than those who bought their first property five years ago, who saved for an average of four years. This difference is likely due to the much higher proportion of those who say the cost of everyday living expenses eats into the amount of money that could otherwise be saved (40 per cent of current first time buyers’ versus 18 per cent of those who bought five years ago).

Despite these steep increases, FTBs appear optimistic about the property market with 10 million UK adults planning to buy their first home in the next five years. Indeed, 45 per cent of those looking to buy are more positive now than they were a year ago, compared to just 20 per cent whose confidence had declined.

The research also shows the health of the UK economy has had little effect on those planning to buy, with 44 per cent saying that while they are concerned, they will go ahead with their purchase regardless, and 39 per cent claiming that economic factors will not affect their decision to buy at all.

Read more about this research here.