More than half of first time buyers are dependent on family money to raise the deposit on a home of their own, new research from Nationwide Mortgages has revealed.
Almost a third (31%) said that they would be calling on the Bank of Mum and Dad, while eight per cent were reliant on other relatives such as grandparents, according to the research, which asked would-be and recent first time buyers about their home buying plans. Another 15 per cent said that funds from an inheritance would be used for a deposit on a property. There are also potentially damaging misconceptions about what can be used as a home deposit. While two thirds (63%) said they were active savers into savings accounts, with a quarter (26%) specifically identifying the Help to Buy ISA as their savings vehicle of choice, a significant proportion thought they could use a personal loan (10%) or credit cards (5%) to fund a deposit. This is despite the fact that unsecured borrowing for this purpose could potentially damage their chances of securing a mortgage.
Those questioned were, however, prepared to make sacrifices to achieve the home buying dream. When asked what they would give up in order to buy a home, more than half said they would give up nights out (55%) and restaurant meals (51%), although they were least likely to give up extra TV services and entertainment (28%).
However, seven per cent said they’d even consider giving up a partner or spouse if it meant they could get a foot on the housing ladder. This rose to 11 per cent of the 45-54 age group who would forego a relationship if it meant they could buy a home.
Raising a deposit clearly represents the biggest hurdle for first time buyers. Those surveyed identified their biggest home-buying challenge as being able to pull together enough for a deposit on a home (30%), with the price of the house (21%) and cost of the mortgage (14%) some way behind.
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