Photo by The Bank of Mum and Dad: How Family Help is Redefining the London Property Market
As a journalist, I’ve always been fascinated by the complex and often contentious world of London’s property market. But one aspect that has caught my attention in recent years is the growing trend of family help in getting on the property ladder. With the average first-time buyer deposit in London now standing at a staggering £145,400, it’s no wonder that many young people are turning to the ‘bank of mum and dad’ for assistance.
But what does this trend mean for the future of the property market, and for the younger generation who are struggling to get on the ladder? To find out, I spoke to Lois Child, a 29-year-old lawyer who recently bought her first home in Whitechapel with the help of her parents.
‘I think it’s really important to not make it sound like I could have managed it on my salary,’ Lois says candidly. ‘It’s definitely not easy to do it on your own.’ Lois’s parents sold their family home in Essex after they retired and moved down to Dorset, using the leftover money to help Lois and her brother with their deposits. In Lois’s case, the money was enough to cover a 25% deposit on a flat in Whitechapel.
‘I think it’s really important to not make it sound like I could have managed it on my salary.’
But Lois’s story is not unique. According to new research from Zoopla, 79% of first-time buyers in London had financial help from family to get on the property ladder. This assistance can come in many forms, from gifts of cash to loans or even co-signing mortgages. But whatever the method, the result is the same: young people are relying on their families to help them achieve their dream of homeownership.
The London property market is increasingly reliant on family help.
But what are the implications of this trend? On the one hand, it’s clear that family help can be a lifeline for young people who are struggling to save for a deposit. Without this assistance, many would be forced to rent for years, or even decades, before they could afford to buy. On the other hand, the reliance on family help is creating a new kind of social divide in the capital. Those who have access to the ‘bank of mum and dad’ are able to get on the property ladder far sooner than those who do not.
‘Getting help from parents and family is very much the default when it comes to buying a first home.’
This is not just a matter of fairness; it’s also a matter of economics. With the average age of first-time buyers in London now standing at 32, it’s clear that many young people are being forced to delay their entry into the property market. This can have serious consequences for their financial stability and security, as well as for the wider economy.
So what can be done to address this issue? One solution might be to increase the availability of affordable housing in the capital. This could involve building more homes, or providing subsidies for first-time buyers. Another solution might be to provide more support for young people who are trying to save for a deposit. This could involve offering tax breaks or other incentives for those who are saving for a home.
Whatever the solution, it’s clear that the trend of family help in the London property market is here to stay. As Lois Child says, ‘I do feel a bit guilty about this, but I know I’m really privileged to have had the help I have.’ It’s time for policymakers to take notice of this trend, and to start thinking about ways to make the property market more accessible to all.
The property ladder is becoming increasingly difficult to climb.
In the meantime, young people like Lois will continue to rely on the ‘bank of mum and dad’ to get on the property ladder. It’s a trend that is redefining the London property market, and one that will have far-reaching consequences for the future of the capital.
The London skyline is changing, but the property market remains a challenge for young people.
