Bank of mum and dad calls in its debts
April 20, 2007 by admin
Filed under News, News-Banking
University graduates are still reliant on their parents to help them get onto the property ladder but the bank of mum and dad is getting stricter.
According to new research, 39 per cent of graduates rely on money from their parents to get a deposit on a new home.
However, more and more parents now expect their children to pay them back rather than simply offering the money as a gift.
Scottish Widows Bank says that in 1996 38 per cent of parents gave their graduate children the money for a deposit as a gift but this has fallen to just 32 per cent today.
The reduction in charity from parents may be a symptom of poorer finances for most people and this is supported by the fact that the number graduates needing a loan has also increased.
In 1996, nine per cent needed to turn to their parents for money, while today that figure stands at 18 per cent.
Another contributing factor is high rental costs which Scottish Widows says are forcing many graduates to turn to their parents for financial help.
“Rental rates are so high for some that it is very difficult to put enough money aside to save for a deposit meaning many graduates have to rely on their parents to fund that first step onto the property ladder,” said Richard Clark from the bank.
“House prices and affordability are huge barriers for first time buyers but they should be aware that there are other options available to them – both lenders and the government need to keep working on ways to solve this ever growing problem.”
