38% of parents think their children are less financially independent than they were at the same age – with many unable to even start saving for a first-time buyer deposit, according to new research from mortgage lender, Generation Home.
However, 35% of parents feel that their children are more financially independent than they were and another 27% thought it was more or less the same.
However, with households expected to live with as much as £1,200 less a year by 2024, due to the soaring cost-of-living, achieving or even retaining a sense of financial independence has become much harder. This is significantly felt within the current overinflated property market which continues to price out first time buyers across the country.
While a proportion of parents think their adult children are financially independent and need little if any support, 10% of those aged 18-34 years old are resigned to the belief they will never be truly financially independent. 42% think they will be somewhat independent but may need some support now and then.
Generation Home said that regardless of whether parents believe they were more financially independent than their children or not, there are several barriers which continue to prevent those willing to financially support their adult children with important milestones – like getting on the property ladder – as much as they would like to.
For example, 22% of parents cite the current cost of living as the main barrier, preventing them from gifting their children money towards a deposit. 11% of this group said the pandemic had negatively affected their finances and 33% simply say they just can’t afford to help their children with a deposit for their first home.
Indeed, just over 30 years ago, the average cost of a home in the UK was £58,250 – in today’s market, the average property costs a significant £218,505 more for a similar sized home3
While providing the bulk of the finances may be difficult, 47% of parents are willing to co-sign on their child’s mortgage and be responsible for loan repayments alongside them, just to ensure they could finally secure a place on the property ladder.
Sophia Guy-White, co-Founder of Generation Home, said: “Families have debated the age-old adage that things were simply better in “good old days.” Looking at the rate of growth in the property market, it is clear that today’s aspiring homeowners are finding it considerably more difficult than their parents to buy their first home.
“Positively, what our research does highlight is that most family networks are willing to financially support young people get a foot on the property ladder. With many parents worried about their own retirements, they are looking for innovative ways to transform young people’s living situations and turn them from ‘Generation Rent’ into ‘Generation Home’.
“By formalising the financial support, we give confidence to families and support networks about the repayment process, and we know we can help many more people get on the ladder, as quickly as possible.”
