The Rise of the Bank of Gran and Grandad
The Bank of Mum and Dad might be behind 25% of British mortgages - lending up to as much as £5bn a year - but there’s a new bank in town. According to a report from Santander, as many as 8% of first-time buyers (FTBs) now rely on their Grandma and Grandad to raise money for a deposit.
This is a four-fold increase from five years ago when this accounted for just 2% of FTBs. Not only this but almost one in three (32%) will us take a loan from their family to get on the property ladder - up from 13% just half a decade ago.
On top of this, one in five expect to spend half of their annual income when it comes to getting a deposit. This is a grand difference to current homeowners who, according to the survey, who only spent 20% of their salary on buying the first home.
How long does it take to save for a house?
Five years ago, it took buyers four years on average to save for a deposit, a year quicker than what FTBs expect today. This is largely due to the fact that 40% of buyers today spend a big portion of their earnings on everyday living.
Almost half of all prospective FTBs are more positive now than a year ago compared to 20% whose confidence has declined. The study suggests that 10 million adults across the United Kingdom will be buying a home within five years.
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