Bank of mum and dad still a safe bet for home ownership

Jelson Homes has reported a surge in young buyers in the last 12 months and the Leicester-based developer puts it down to one thing – the trusty bank of mum and dad.

Compared to the regular high street banks and building societies, the bank of mum and dad tops the polls in the lending stakes; lovely long borrowing periods, no or little interest and flexible repayments options – it’s a borrowers dream come true.

Jackie Woodward, sales manager for Jelson Homes, comments: “We’ve witnessed that as deposits have become harder to save, the region’s parents are now pivotal in helping their children move on to and even further up the property ladder, and that’s right across our portfolio of developments.”

A set of figures from 2012 tell the story. Three years ago the average cost of first-time property was £137,500, and the average deposit required was £27,500, according to the Council of Mortgage Lenders. No wonder that 64% of first-time buyers required help from mum and dad – up from as little as 30% just a few years earlier, before the credit crunch. The impact stretches further: the CML reported that a quarter of “second steppers” also needed the help of family to move up the housing ladder.

This is all despite the fact that, also by 2012, the average age of a first-time buyer had hit 35, up from age 30 only five years earlier. And it’s still rising now. Jackie adds: “Help from parents is still the dividing line between those who can and those who can’t afford to buy and I believe it looks set to become even more pivotal as older children want their space and freedom and importantly, a home of their own.”