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The cost of parenthood increases
As rising house prices become more and more prohibitive to first time
homebuyers trying to haul themselves onto the first rung of the property ladder
it seems that a significant degree of the financial burden is resting squarely
on the shoulders of the parents of those looking to flee the nest.
According to a report by Alliance & Leicester Mortgages
parents are paying on average £21.314 to help their children buy that difficult
first property (the cost of which now averages £162,055). With the
much-documented upward spiral of house-prices and the likelihood of hefty
student debts it would appear that for an increasing number of people the only
way of getting on the ladder is by seeking the help of their parents.
A fifth of the parents surveyed had already helped shoulder the financial
burden of their children’s first home and another one in five plan to help out
when the time comes. The report also shows that parents are willing to
contribute more money than ever – the average amount has gone up £3,637 on
last year’s average figure of £17,677. It would seem the cost of parenthood
is rising dramatically.
So what’s causing this apparent upsurge in parental generosity? According
to the report guilt is a big factor – more than on in three say they’d feel
guilty if they weren’t able to contribute (interestingly fathers feel this
burden of guilt more than mothers with nearly half of them seeing it as their
responsibility to help out the kids.)
Stephen Leonard, Director of Mortgages
at Alliance & Leicester commented: “It has become increasingly common
for parents to offer financial assistance to their children when they come to
buy their first home. Rising house prices mean first time buyers have to
find bigger deposits to secure their property, with many having to fork out for
stamp duty as well. This means extra funding from parents can often make
the difference between renting or being able to get on to that first rung of the
property ladder.”
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