According to the 2018 Generational Property Ladder Survey commissioned by non-bank lender Homeloans, 65 per cent of parents were either currently making financial and personal sacrifices for their children and/or grandchildren to help them buy their own home, or were planning to in the future.
Of those parents willing to provide financial assistance to their children, over one in four (29 per cent) were prepared to retire later than planned.
The research also found that 36 per cent of parents said that they would be willing to be a guarantor on a loan from a financial institution, with 32 per cent stating that they would be willing to purchase a home in partnership with their children.
Reflecting on the results, Homeloans’ head of marketing, Matthew Keall, said: “Due to tougher mortgage lending standards, it’s increasingly difficult for younger generations to break into the property market.
“To help with this, parents are doing what they can to help their children become first home buyers, from cutting back on their own spending to going guarantor on a loan.”
The survey also found that 39 per cent of parents said that they would be willing to live more simply by sacrificing small luxuries like going to restaurants or movies, 33 per cent said they would be willing to delay big expenses like holidays or a new car, 30 per cent were willing to dip into their savings to provide financial assistance, and 10 per cent were even willing to re-mortgage to free up cash.
Further, almost half (49 per cent) said that they have given cash to help their children or grandchildren to buy a home and 16 per cent had provided an interest-free loan.
Additionally, the survey revealed that 45 per cent of parents/grandparents would consider letting their children move into the family home while saving for a deposit.
“It’s commonly known how difficult it is for first home buyers to get into the market, particularly in popular metro areas, and we’re seeing parents are prepared to go the extra mile for their children or grandchildren,” Mr Keall added.
“If parents are able to help financially by giving cash or going into partnership on a property, that is clearly the fastest way to help a first home buyer onto a ladder.
“However, providing support to help your child save, such as by allowing them to move into the family home temporarily, or acting as guarantor on a loan, will also help them to own a home sooner.”
Mr Keall concluded: “One idea for parents with adult children living at home could be to charge them board, and then invest the money to put towards a deposit. Not only does it give the kids a financial boost, it also helps them learn the discipline of saving.”
[Related: Housing market ‘broken’ for aspirants]