Almost half of first-time buyers in their 20s received a leg up from family, according to the Institute for Fiscal Studies (IFS). Such gifts average around £25,000, rising to £31,000 in the South East.
In Catford, David benefited from a £100,000 gift from his parents. He had saved up £60,000 himself, allowing him to put down a 50pc deposit despite earning £40,000 a year working as an office manager.
“My parents have helped me to get onto the property ladder, which I just could not have done without their help… potentially ever,” he admits.
Parental help is often crucial for helping young people get on the ladder, says Bee Boileau from the IFS.
It is also the single most effective way for parents or family to gift money that will generate a return, her research has found.
“Putting down a bigger deposit as a proportion of the house value really reduces the amount of mortgage interest you’re paying and so has really high financial returns compared to other ways of using that kind of money,” Boileau says.
The amount of financial help available to young people vastly depends on their parents’ circumstances. If someone’s parents owned their own house, the child is far more likely to buy a property.
Around half of all 25 to 39-year-olds whose parents owned their home have managed to get onto the ladder. For the children of renters, it was a little over a fifth.
It means that you are more than twice as likely to become a homeowner yourself if your parents own their property.
