Housing crisis: Retired Brits twice as likely to fund their children’s home deposits
RETIRED parents in Britain are twice as likely to fund their children’s home deposits than their counterparts in other English-speaking countries, with London pensioners even more likely to support their offspring.
Putting the housing affordability gap into stark relief, research commissioned by payments provider UKForex showed that out of 1,135 British retirees surveyed, 27 per cent have helped their children with a deposit for a house. This is compared to an average of 18 per cent in Australia, Canada, the US and New Zealand.
The average UK house price is now £296,549, more than 10 times the average salary of £27,200, making it increasingly difficult for first time buyers to get onto the property ladder without support.
In the capital, where a shortage of housing and a dense population have made property prices skyrocket far more than across the rest of the UK, 33 per cent of pensioners have helped their grown children with a deposit.
Read more: London house prices broke the £600,000 mark for the first time in April
Londoners are also more than twice as likely to pay their adult children’s rent or mortgage, equating to 32 per cent of respondents compared to the national average of 15 per cent.
High rents mean that it is often difficult for young would-be buyers to save money, leading many to live at home with their parents. 26 per cent of retirees said that their adult children live at home, with this rising to a third of all retired parents in London.
Read more: Six reasons why London's property market won't collapse
Conversely, while their children are struggling to get on the ladder, their parents are far more comfortable. 73 per cent own property with no mortgage, while 12 per cent own second properties.
“Housing affordability in the UK has become a significant challenge, with politicians of all stripes seeking solutions,” said Stephanie McMahon, head of research at estate agents Strutt & Parker.
“It is no surprise, therefore, that British parents seek to subsidise their children’s house purchases.
“Interestingly, our own analysis indicates that relatively limited numbers of people are selling their properties to support children or relatives, although the figure is growing (8 per cent in 2013; 11 per cent in 2014).
“We would also anticipate that parents are taking equity out of their homes without necessarily selling them.”