Parents role changes as first-time buyers choose to go it alone

First-time buyers looking to get on the property ladder are less likely than before to turn to their parents for help according to the latest findings from the Abbey First Time Buyer index.

Just one in ten (9.7 per cent) potential homeowners expect their parents to offer financial help to get their first home compared to the one in five (23 per cent) surveyed six months ago. Only seven per cent expected their parents to be their mortgage guarantor compared to the corresponding 12 per cent from the year before.

Despite this decline, the research found that parents were still helping their children in other areas of buying a home, with 45 per cent of new homeowners, the same as last year, expecting their parents to help them when they move into their new property.

Abbey believes that whilst parents are part of the solution for many first-time buyers, mortgage lenders can help too, by offering good mortgage deals with features that meet the needs of first-time buyers.

Of those that expect to get financial help from their parents, over half (55 per cent) believe their parents will not expect the money they borrow to be returned while a further 15 per cent believe that they will never be in a position to be able to pay them back.

Despite the problems facing first time buyers getting onto the property ladder, the dreams and aspirations for the perfect first house remain. In terms of what type of home is most preferred by first-time buyer, the idyllic country cottage leads over the town house, the city apartment and the designer home.

Nici Audhlam-Gardiner, Head of Mortgages at Abbey, said: “The decline in the number of potential homeowners relying on their parents is a positive indication that first-time buyers are finding alternative ways of funding their homes. Certainly part of this is due to the rise in the number of mortgage providers offering better solutions to suit the needs of would-be homeowners.

“However, despite the decline parents still have a large role to play. With one in ten people still requiring parental help to buy and over half still needing help on moving day, its not just the children that feel the financial burden of buying a home.”

To help First Time Buyers, Abbey has increased its standard income multiple so that it can lend up to five times income subject to an applicants affordability.

Abbey offers an exclusive First-Time Buyer (FTB) product range that can help FTBs save upfront costs and lower their monthly payments. This includes mortgages with as little as just three per cent deposit, deals that offer five per cent money back, which can then help towards covering additional costs such as stamp duty, and mortgages where customers can defer part of the amount they borrow until the end of the mortgage, or even extend the length of their mortgage.

Abbey will be broadcasting a live web TV programme to offer advice for First Time Buyers at 17:00 on Thursday, 1st March 2007. To view the programme log on to webchats.tv.