First time buyers dependent on family help for purchase as many are struggling to get onto the housing ladder
More than a third of first time buyers rely on their family for help in securing a house, according to a report by the Social Mobility Commission.
It found that many are struggling to get onto the housing ladder because their parents or other family members can’t afford to help them out.
Alan Milburn, former Labour Cabinet Minister and Chair of the Commission, said the problem threatens to widen the gap between those with varying incomes.
He said: “Owning a home is becoming a distant dream for millions of young people on low incomes who do not have the luxury of relying on the bank of Mum and Dad to give them a foot up on the housing ladder.
“The way the housing market is operating is exacerbating inequality and impeding social mobility.
“It is welcome that the Government recognises the growing problem people face in getting on the housing ladder.
“A major national effort is needed to expand opportunities for home ownership and will require more radical action on housing supply.”
While 34 per cent of first time buyers now utilise the support of their parents, a further ten per cent rely on inherited wealth, according to the Commission.
It added that home ownership among those aged 25-29 has fallen by more than a half in the past 25 years, from 63 per cent in 1990 to 31 per cent most recently.
Of UK households that have dependent children, 30 per cent currently have assets which could be used as a deposit to be placed on a home.
However, this figure drops to just ten per cent among households with no formal educational qualifications over two generations. Anglia Ruskin University’s Dr Paul Sanderson, the lead author of the report, said: “Going forward, the gap is likely to continue between those in the UK who can acquire that most significant of financial assets, the family home, and those who cannot.
“Only better-off young people and those who have parents who have already accumulated housing wealth are likely to be able to consider home ownership without radical changes to the housing market.”
The report also made predictions based on the situation of the UK economy and how this will affect the housing market. If the economy improves, the number of first time buyers relying on their parents will peak at around 39 per cent in 2021/22. If it weakens, the figure will stay at a similar level before rising to nearly 40 per cent by 2025.