Fortunate first-borns cash in on home deposits

First-borns may complain that parents are stricter and rules are harsher on them than their younger siblings, but new research from Abbey Mortgages has found that they will eventually reap the benefits of being the eldest. First-borns are more likely than their siblings to be given money to buy their first home and parents also spend more time helping their first child choose a property than they do with the others.

Abbey’s research found that 17 per cent of first-borns are given money towards their first home, compared to 12 per cent of second-born children and nine per cent of third-born kids. First children reap the benefits of their parents’ time too with mums and dads spending 31 hours helping ‘number-one-son or daughter’ compared to 19 hours for ‘number two’ and 14 hours with the third child.

But while first-borns have a higher chance of getting a deposit from their parents than their younger siblings, if they do get a deposit, second and third-born children are more likely to get a larger amount. A first-born child is given on average £3,346 to move into their first home, compared to second-born children who receive a whopping £7,899, and third-born children who bank a massive £9,715.

According to Abbey Mortgages there are two reasons for this trend – parents have more disposable income by the time their younger children leave home and rising house prices now mean larger deposits are required for younger siblings.

Nici Audhlam-Gardiner, Head of Mortgages at Abbey, commented: “Most parents tend to think they are very fair when it comes to financial gifts to their children, but what’s fair in one circumstance may not be fair in another.

“In recent years, property price growth has been so strong that even a gap of two or three years can mean a big financial difference when it comes to raising a deposit, even if the children choose to live in similar areas. Now that house price growth is slowing, we may find that parents’ gifts to siblings even out a bit.”

Abbey Mortgages research also found an upsetting trend among ‘only-children’. Although ‘only-children’ are given, on average, slightly more money than a first-born child, at £3,621, towards their home, they receive far less time from their parents. According to the research an only-child gets just 12 hours of their parents’ time to help them choose a home and move in – that’s less than a third born child (14 hours).

Nici Audhlam-Gardiner continued: “The first year in particular can be hard for first timers as they have stamp duty and the moving costs to deal with. However there are mortgages that can help with that. Abbey has just introduced a 3-year stepped rate product, which starts at 4.99 per cent in year one and climbs gradually through years two and three. This can help first time buyers get onto the ladder, with the lower payments on their mortgage, and have extra money to sort out other costs such as stamp duty in the first year.”