For many would-be homeowners, the most difficult part of the process is amassing a suitable deposit. However, some particularly lucky house-hunters will find that their stress will soon be at an end, with their Christmas stocking set to be stuffed full with the ultimate gift.
Research from My Home Move has revealed that over one in 20 homebuyers this year have covered all or part of their deposit by using a cash gift, which has in turn helped to fund over 50,000 house purchases. Given how quickly house prices are climbing – not to mention average rents, which could make it even harder to save – it's perhaps no wonder that so many people are reliant on the Bank of Mum and Dad to get the ball rolling.
An increasing number of people are doing just that, with 4.71% of homebuyers receiving a gifted deposit in 2014, a figure that's risen to 5.04% this year. Not only that, but the proportion of home purchases involving a gift for a deposit spiked to 5.6% in December 2014 and 5.9% in January 2015, which suggests that a cash gift towards a deposit is gaining popularity as a Christmas present in many families.
The rising number of "boomerang kids" (those who return to the family home after previously moving out) means that many are escaping the bind of rent payments, with the proportion of those aged under-35 living with their parents having increased from 36% in 1996 to 40% today.
Government schemes such as Help to Buy have further improved the market for first-time buyers by reducing the level of deposit required to 5%, but even so, the difficulty remains – and many people still rely on a gift. In fact, 47% of transactions under the Help to Buy equity loan scheme included a gifted deposit, which just shows that, even with Government support, it's still difficult for many would-be owners to get on the ladder by themselves.
"Struggling first-time buyers might be wishing that their parents come to the rescue of their homeownership dream this Christmas by helping with a cash deposit," commented Doug Crawford, CEO at My Home Move. "Rising house prices and steep monthly rental bills that hinder young people's ability to save mean that help from mum and dad has become increasingly important in recent years.
"Despite schemes like Help to Buy, many young people struggle to get enough money together for a deposit – and it's only natural that parents who have the means are stepping in to help them get the money together. The fact that one in 20 home purchases now involves a gifted deposit shows the lengths that parents are willing to go to secure their children a foot on the ladder."
However, he adds that parents should be aware of the legalities involved in gifting a deposit, and urges anyone going through that process to start the paperwork early and ensure there aren't any delays when it comes to buying that dream first home. Then all you've got to do is find the right mortgage, and with more deals available to first-time buyers than ever, there's never been a better time to take a look.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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