First-time buyers expect £17k to help them on the property ladder – but parents have different ideas about how much to give…
Tensions are increasing at the Bank of Mum and Dad amid a clash of expectations about how much money parents plan on giving their children to help them onto the property ladder.
Many children are banking on a generous hand out from the Bank of Mum and Dad to buy their first home, exclusive research for MailOnline revealed.
A child typically expects their parents to fork out £17,013 to help them with a deposit, according to the findings by insurer Aviva.
The average price of a British home is £267,000 – the asking of this family home in Menstrie, Clackmannanshire (Scotland), which is on the market via estate agents Allen & Harris
However, there seems to be a massive gap between expectation and reality as it appears that parents do not expect to offer anywhere near this amount.
A total of 48 per cent said they would give less than £10,000, while 29 per cent plan to give nothing.
The Aviva research found that a total of 40 per cent of first-time buyers expect their parents to give them money towards buying a home.
Within this group, 23 per cent are hoping that their parents give them more than £20,000.
The survey was based on 1,000 parents with children aged between 16 and 34 years old and 1,000 children (of the same age).
The Aviva research highlights how as a nation we don’t tend to talk about money, which can sometimes lead to a gap between expectation and reality This typically priced £267,000 family home in Elgin , Moray (Scotland), is on the market via estate agents Wink & MacKenzie
Parents may decide to keep quiet about how much money they think their children are expecting as this is the highest figure of all in the research.
Parents said that the average amount they thought their child expected to receive from them to help buy a home was an eye-watering £55,589.
This is perhaps a more realistic view given soaring house prices and mortgage requirements allowing for a maximum of 4.5 times annual salary.
The average price of a home in Britain has climbed more than £4,628 during the past year to £266,728, according to property website Zoopla.
Should they be able to put down a 25 per cent deposit of almost £67,000, an aspiring homebuyer would need to be earning an annual wage of £45,000 to be able to afford to buy by themselves.
The sale of this average priced £267,000 house in Holland-On-Sea, Clacton-On-Sea, is being handled by estate agents Blake & Thickbroom
Aviva’s Lindsey Rix, said: ‘As a nation we don’t tend to like talking about money, which can sometimes lead to a gap between expectation and reality.
‘We have done a lot of research in this area and we know that it can be a huge challenge for young people to get together a deposit for their first home.
‘Many parents would love to gift money to their children to help them to get on the property ladder, but they have their own financial commitments, so this may not always be possible.
‘There is some good news for parents though, in that children actually hope to receive far less than parents think they want to receive – so it may be a good idea to discuss expectations as a family, to avoid any disappointments.’
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘Whereas in the past all parents had to worry about was how much to pay towards their child’s wedding, now they are expected to dig deep to help those children onto the housing ladder.
‘Soaraway property prices, combined with student debt and the high cost of rent, means many would-be first-time buyers have no chance of getting a foot on the property ladder without parental help but parents and children don’t seem to know how much is expected, and reasonable, to gift.
‘As we live for longer, the perils of giving away substantial sums of money to offspring may become all too apparent as parents then ‘run out’ of cash in retirement. Trying to assist children with their dreams of home ownership while at the same time making sure it is affordable from the parents’ point of view, is a situation many seem to be struggling with.’
The comments follow separate research by Nationwide Building Society that found the biggest hurdle for first-time buyers was raising a deposit at 30 per cent.
This was followed by 21 per cent who said the price of the house posed the biggest challenge while 14 per cent said it was the cost of the mortgage.