Number of hopeful first-time buyers living with parents is on the rise
With no other option, potential buyers from younger generations have found themselves having to move back into their parents’ homes to generate the necessary income for a deposit.
There’s no doubt in the current economic climate that it’s tough for those looking to buy their first home. With high prices and low wages, it can sometimes feel like you’re standing at the bottom of a towering mountain with little hope of ever reaching the summit.
The obvious response to this situation for potential buyers is to limit their expenses, and according to new research by Aldermore Bank, many are opting to move back in with their parents to save the necessary cash.
With figures from 2016 showing that 25% of all purchases by UK home buyers now involve the bank of mum and dad to some extent (pumping some £5 billion into the market), it’s clear that young generations are still desperate for help.
The greatest issue, however, is that returning to live with one another once again now that all members of the household are adults means that both parties have to deal with a negative fallout from both a financial and emotional standpoint, and therein lies the problem.
For the children, now adults, having to move back into their parent’s homes has left them experiencing feelings of failure and self-resentment, while their parents have to deal with increasing demands on their household budget, and an inability to enjoy their later years the way they had planned.
Many families have found that the new living arrangements have created a decline in life satisfaction and a damaged emotional bond between parent and child.
The extra costs alone add up to an average of £4,996 for mum and dad per year, and this is hampering their ability to realistically save enough for their pension in later life.
“Our report reveals just how difficult this can be to navigate, with a real impact not just on parent’s finances but also on the relationship with their children and their own ability to save,” said Charles McDowell, commercial director for mortgages at Aldermore.
“Furthermore, as parents are less able to save for their retirement, more people will require help to unlock the value held within their property in later life. This is an intergenerational problem that goes beyond the simple view of the Bank of Mum and Dad.”
Industry experts believe that without a substantial investment into the housing industry for new-builds or the appointment of a new housing minister who truly understands the scale of the problem, the crisis will not only affect younger generations, but also those who are looking to sell their house fast in order to downsize during old age.
Worried about being able to sell? 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.