‘Bank of Mum and Dad’ still supporting third of second steppers
Recent research has revealed that over a third of those trying to move up the housing ladder are seeking financial help from friends or family.
According to Lloyds Bank, second-steppers now borrow an average of £24,450, having risen by £4,000 over the past year. This is despite the fact that over half will have received financial support to buy their first home, with the average sum being around £19,824.
The results of the study showed that the ‘Bank of Mum and Dad’ was nevertheless keen to support their offspring, with 54% of parents claiming that they would sue their own savings to fund their child’s property purchase. Just under half (48%) said they would do this by downsizing in order to unlock equity, whilst two-fifths said they would remortgage.
As well as parental support, the figures show that second-steppers are also willing to make sacrifices in order to climb the property ladder. For example, 28% claimed that in order to minimize challenges when eventually undertaking the move, they would have fewer children than originally planned.
Over two-thirds (67%) state that they are now making regular contributions to their savings to boost available funds, whilst in order to raise equity, just under half (47%) are overpaying on their mortgage.
However, a key barrier for those wanting to move up the property ladder is a lack of suitable homes. Whilst 26% claimed that they are yet to find the right property for them, 25% said that there is a lack of affordable property.
Commenting on the figures was Andrew Mason. The mortgage products director at Lloyds Bank said: “Support from generous family and friends remains vital in helping second steppers in taking the next step on the property ladder, despite more second steppers now feeling optimistic about the housing market.
“We continue to see parents make big sacrifices as their children return for help with housing for a second time. However, to ease the burden on parents, we are seeing more second steppers plan ahead for their next big move by saving and paying more to their mortgage.”