A survey of some 1,000 first time buyers by TSB suggests a large majority of them moved back to their parental home to save money on rent.
Around 80% moved back to Mum and Dad while an overwhelming 96% received financial help for their deposit, with 68% receiving help from family and 57% from friends.
The FTBs saved for 2.95 years on average. Typically those paying rent as well spent £960 a month in rent prior to purchasing their home but as a result of buying, 45% felt financially more secure.
The average age of first-time buyers went up to 32 years and the average length of mortgage term was 31 years.
Average deposits across the UK were 18.7% of purchase price. London was the highest at 23%, Wales the lowest at 13%.
To afford their deposit some 38% had delayed major purchases, 37% limited their socialising and a similar 37% took a second or additional job.
Craig Calder, director of secured lending at TSB, says: “It’s clear that compromise is key to getting on the housing ladder in a preferred location – with most first-time buyers forgoing a dream home but feeling relieved, and more financially secure having made the move.
“Many made sacrifices to meet their deposit targets – such as moving in with parents, and taking a second job. To secure the best deal for your housing and affordability needs, do speak with a broker, or your bank.”
Mary-Lou Press, NAEA Propertymark President, comments: “This has been a growing trend for some time, indicating how expensive it is for first-time buyers to get onto the housing ladder, so much so that they have to make enormous sacrifices and/or depend upon financial help from their relatives just to purchase a property.
“What is needed to make housing more affordable is targeted help, and we are seeing many financial institutions take a lead here with flexible mortgage products, as well as a sustainable supply of new homes that will stabilise supply and demand levels, which can hopefully be achieved by the UK government and the devolved administrations meeting their individual housing targets.”
