New research has revealed that the Britain’s difficult housing market is forcing many parents to help their adult children get onto the property ladder.
Of 1,135 British retirees surveyed, more than 12% provide financial support to their adult children. Of those, 27% have helped their children with a home deposit.
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The survey, commissioned by international payments provider UKForex, compared retirees in Australia, Canada, the UK, the US and New Zealand, and found British retirees to be the most generous with their children’s housing deposits.
British retirees funded their children’s home deposits 50% more often than the international average (27% versus 18%). In the US, only 8% funded their children’s home deposits, with 12% helping out in Canada, 19% in Australia and 25% in New Zealand.
High house prices
The British generosity comes in response to a particularly difficult local housing market. In the UK, the gap between earnings and house prices is widening, with the average homebuyer having to spend 10 times their salary on a property. In contrast, the average house price in the US is only four times more than the average salary.
As a result, it has become harder than ever for young British buyers to make their first deposit without support.
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Stephanie McMahon, Head of Research at estate agents Strutt & Parker, said: “Housing affordability in the UK has become a significant challenge, with politicians of all stripes seeking solutions. It is no surprise, therefore, that British parents seek to subsidise their children’s house purchases.
“Interestingly, our own analysis indicates that relatively limited numbers of people are actually selling their properties to support children or relatives, though the figure is growing. We also expect that parents are taking equity out of their homes, without necessarily selling them.”
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