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First-Time House Buyers Looking To Parents For Financial Help Says Report

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Financial assistance from relatives was needed for almost 20% of UK first-time buyer sales last year, a report has found.

Without this help around £5.3bn worth of property deals would not have been possible.

The report, by the Centre for Economics and Business Research (CEBR), also found that the total value of first-time buyer transactions fell from £30.2 billion to £28.5 billion per year between 2008 and 2011.

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First-time buyers are finding tough economic time particularly difficult

Daniel Solomon, the chief author of the report, said: "To some extent, families have moved in to fill the gap - providing gifts and loans to their first-time buyer relatives.

"Families' contributions have been invaluable, helping thousands to get on to the housing ladder who would have missed out otherwise."

A North London mother, who wished to remain anonymous, said she was helping her 24-year-old daughter buy her first house, by contributing around the third of the cost, because people were having to wait too long to get on the housing market.

"When I was young, my first house cost £28,000. You couldn't buy a shed for that these days around here.

"Young people are having to wait until their 30s before they can buy. With no (home) building going on things are only going to get worse.

"The rich are getting richer and they can pay unlimited amounts for property whilst the rest are being left behind."

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A double-dip recession, pay freezes in the public sector and rising unemployment are all seen as factors prohibiting first-time buyers from getting a foot on the property ladder. Added to this is the reluctance of banks to give credit to households.

An £80bn Funding for Lending scheme has been launched in an effort to encourage lending but any positive results will not be immediately visible.

The National Association of Estate Agents (NAEA) report found that of all the property deals in the UK last year, only 18% were first-time buyers.

To be considered a healthy market analysts usually look for levels around 40%.

The report spelled out the stark situation: "The UK housing market in August continued to stagnate with no movement in sales levels and slight decreases in supply and demand."

CEBR have predicted that the situation will improve over the next five years as the UK gradually recovers from recession and the Eurozone crisis.

As a result, first-time buyers should become less reliant on families for help.

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