It is correct to say most people find property buying to be a difficult task, and for first-time buyers, it is even more challenging. There is a lot to be said for finding support when you look to buy a home, and there are Government backed schemes for first-time buyers to consider.
However, given the sums of money associated with buying property, many first-time buyers consider the Government support to be insufficient. This is why many of these buyers are looking for support from family members and loved ones.
All help is welcome
Most buyers are familiar with the phrase, “The Bank of Mum and Dad”, but right now, support from ”The Bank of Gran and Grandad” is also very welcome for people looking to step on to the property ladder.
A new study suggests that financial support from more than one generation of family members is crucial in helping buyers find the house that is right for them.
According to new research looking at 2020, the average gift to buy property was £42,500. This is close to two-thirds of the average deposit required by a first-time buyer, which stands at £57,278.
Gifts vary across the country
As you would expect, the gifts from people in London were more generous, to a tune of £102,826; but given the cost of buying property in London, this makes sense. The average size of deposit offered in the South East of the country was £61,500.
However, while the size of average deposit gift in places like Yorkshire or the North West were smaller in size, they were just as important, if not more so. The average gift for buying a property in Yorkshire was £33,313; but this accounts for 77% of the average deposit needed. In the North West, the average gift of £34,347 accounts for 76% of the average deposit needed.
Will Hale, CEO at Key, comments: “Finding almost £60,000 to use as a deposit for your first home is tough – especially in the current economic environment - and therefore it’s not surprising that many younger people have looked to take advantage of the stamp duty holiday. In 2020, older homeowners released almost £755 million of equity in order to help younger members of their family meet a range of costs including supporting them with an average of £42,500 to use for a house deposit.”
Will Hale continued by saying; “For many people, these gifts will have been the enabler to them buying their first home and is a perfect example of how intergenerational wealth transfer can deliver positive societal benefits. The stamp duty holiday has certainly been a catalyst for more activity in this area but helping family is always a major motivation for older homeowners exploring their equity release options.”
Will Hale concluded by saying; “That said, it is vitally important that homeowners get specialist advice if they do decide to use some of the value tied up in their home to help their families. Balancing generosity with their own financial security is vital and a good adviser will help them explore all their options.”
If you are looking to sell your Sawbridgeworth home, it is helpful to know what buyers are looking for, and what is on offer in the local market.
For property enquiries in Sawbridgeworth, please feel free to call us on 01279 600333 or why not email us at firstname.lastname@example.org. With considerable experience in the local market, and free valuation services, we look forward to helping you move.