Gifted Deposits More Popular than ever
Research from Legal & General has shown an increase in gifted deposits from parents now more than any recent years. If the “Bank of Mum & Dad” was an actual bank it would be one of the top 10 biggest lenders in the UK.
£24,000 is the average for most Parental Deposits which are provided within the UK. Extended family members, including grandparents, are also seen to be the common benefactor of Gifted Deposits.
It is only because of the re-enforcement of the income and support from their families that thousands of homebuyers every year are only just able to get their foot firmly on the housing ladder. In fact, without these gifts, the market would turn out very differently within a short period of time.
According to the survey, almost 20% of parents who choose to help their children financially did so due to parental responsibility.
The distance between Property prices and wages over the recent years has grown vastly, further distancing a First-Time Buyers successful chances to owning their first property, especially if there is only one level of income slowing down the process of building savings.
Renting also affects the progress in saving for a reasonable deposit. This often leads to the majority of individuals moving back in with their parents to give them extra time to save and get them on the right track to securing a home.
But the transference of funds from the older relatives could foresee a possible backlash and could affect the parent’s quality of living in retirement.
Based on their survey of 1600 parents who had helped out their children, most gifted deposits were withdrawn from their own personal savings such as pension schemes. Overall, it seems this is just an early inheritance where beforehand the parents help and advise where it’s spent.