Bank of mum and dad now covering rent payments
As the affordability of buying a house continues to decrease, new research has shown that younger people are now finding it just as hard to afford rental payments without parental aid.
For years now, parents have been helping their offspring to gain a foothold on the property ladder by helping to pay for the necessary deposit. As a result, the government has come under fire numerous times from both younger generations who would relish the opportunity to buy houses without additional help, and from older generations who find themselves having to work for longer in order to help their children afford the aforementioned down-payment.
However, while many within the property industry have been waiting for wages to go up in order for housing to become more affordable, new figures released by Legal & General have shown that the situation has become even worse – with parental donations now extending to covering their children’s rent.
For those who are still wondering whether they will ever be able to afford a home, the mere fact that it is 2017 and a large number of young people are having to borrow from their parents just to keep a roof over their head must feel nothing short of devastating.
This year alone, the bank of mum and dad have been responsible for £2.3 billion worth of rent payments across the UK, and when this is combined with £6.5 billion they are paying towards their children’s deposits and mortgage repayments, it certainly begs the question, how much worse can it get?
Even for young homeowners who are already on the property ladder, worries are being compounded by the possibility of negative equity if their worst fears are realised once Brexit is completed – making many question the intrinsic value of their house.
“The lack of affordable housing, low wage growth relative to inflation and burdens of student debt mean that many kids can’t even rent somewhere without significant contributions from their family,” said Dan Batterton, a fund manager at Legal & General.
“Parents want to help their kids get on in life, and the bank of mum and dad is a testament to their generosity.”
The greatest issue for the majority of the public is the knock-on effect from this research, as established homeowners who need to sell their house fast are finding that without a vast reduction in their asking prices, they are unable to sell in the desired short time-frame due to a lack of buyers.
With millennials paying on average over £44,000 more in rent by the age of 30 than those in the baby boomer generation, for those looking to escape the rent-trap the light at the end of the tunnel is getting dimmer by the day.
Failing to attract buyers? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.