Parents 'go dutch' on their children's deposit
The Bank of Mum and Dad is continuing to play an important role in their offspring’s first property purchase with current homeowners having received, on average, half of their deposit (49 per cent) from their parents or their partner’s parents.
The study from Santander Mortgages reveals that more than two thirds (68 per cent) of parents who provided money to help their children get on the property ladder will get nothing back in return as it was intended as a gift. Almost three quarters (72 per cent) of females were gifted the monies by their parents, in comparison to only 62 per cent of men. Almost three in 10 (29 per cent) received the money as the equivalent of an interest-free loan while only three per cent contributed towards their children’s deposit as an investment.
For those that are yet to buy their first home, the average amount they look to receive from parents is £17,900. With the average FTB deposit being just under £25,000 this represents a 71.6 per cent subsidy. More than one in five (22 per cent) estimates that their parents will contribute £20,000 or more.
A third (34 per cent) of those who have children yet to buy a home say they will contribute money towards a deposit in order to help them on to the property ladder.
Miguel Sard, Head of Santander Mortgages, said: “Raising a deposit can be a huge challenge and our research shows that many rely on financial help from their parents in order to get a foot onto the property ladder. Buying your first home can be a daunting but there are ways to make it easier and support is available to help first time buyers with upfront costs.”
“The mortgage market is still competitive, with options available to suit most budgets. Our range of Help to Buy mortgages offer competitive fixed and tracker rates to buyers with a 5% deposit and our 1I2I3 Current Account also gives 1% cash back on mortgage payments.”
The Help to Buy: mortgage guarantee range offers competitive fixed and tracker rates starting from 4.99%, with a minimum deposit of 5% of the purchase price and no booking fees on a property up to the value of £600,000. All products come with the Homebuyer Solution as standard, which includes a free valuation plus £250 cashback, and could save customers over £500 on upfront costs when they buy a new home.
The Help to Buy: mortgage guarantee products are:
2yr Tracker with a 4.99% rate and no fee, with Homebuyer Solution
2yr Fixed with a 5.49% rate and no fee, with Homebuyer Solution
5yr Fixed with a 5.49% rate and no fee, with Homebuyer Solution
Santander 1|2|3 Current Account customers who pay their monthly mortgage payment by direct debit also benefit from receiving 1% cashback on maximum monthly mortgage payments of £1,000.