‘Bank of mum and dad': investing in their future

With a growing number of would-be first time buyers struggling to buy a new home, many parents are looking carefully at ways in which they can provide a potential nest egg for the future of their children, by supplying the necessary funds required to help them get that crucial first foot onto the property ladder.

But while parents are keen to make their children's future a priority of their financial planning, by putting cash aside to help their child buy their first home, it can be very difficult to raise the large cash deposits now required to gain access to even the most basic of mortgage products.

Consequently, a growing number of first time buyers, with the support of their parents, are turning their attentions to the affordable homes sector, with a view to buying a cheaper home, according to the sales and marketing director of Thames Valley Housing, the London based housing association.

Kush Rawal comments: "Whilst utilising the bank of mum and dad is a common occurrence in today's tough first time buyer market, it is still understandably very difficult for parents to find a spare £30,000 or so for a child's deposit. Most current first time buyers are gathering contributions from parents or grandparents, mixed with their savings and perhaps the funds of a joint buyer such as a sibling, friend or partner.

"Thames Valley Housing is currently noting a slight increase in the number of parents helping children onto the property ladder through purchasing a shared ownership property. Buyers can purchase from 25% of a new home, which means finding a deposit from £5,900 for a one-bedroom property in our current portfolio of shared ownership offerings. This is a dramatically more affordable figure to ask for from the bank of mum and dad."