There was no simple trick or saving hack that helped Lois Child save up for a deposit for her first home. Her parents gave her the money for the deposit on a flat in east London.
A 29 year old lawyer working in media and advertising, she wants to be open about the reality of how she got on the property ladder.
“I think it’s really important to not make it sound like I could have managed it on my salary,” she says. “It’s definitely not easy to do it on your own.”
Child is one of eight in ten Londoners who had financial help from family to get a shot at getting on the property ladder.
New research from Zoopla found 79 per cent of first-time buyers in the past five years had assistance, with 75 per cent of those who had help getting the money from their parents.
“I think it’s really important to not make it sound like I could have managed it on my salary.”
In Child’s case, her parents sold the family home in Essex after they retired and moved down to Dorset. “Due to the difference in house prices in different areas, they had a decent amount of money leftover from the sale,” says Child. “They split this amount down the middle for me and my brother, and let us know that they see it as a sort of inheritance that we’re receiving in advance.”
The money was enough to cover a 25 per cent deposit on a flat in Whitechapel. Child isn’t comfortable sharing the exact amount she paid for her home, but the average price for a flat in the area is currently around £534,000 (Rightmove).
“Without their help, I definitely would not have been able to get anything as centrally-located or as good a deal on my mortgage as I did,” she says. It’s not fair — and it’s causing a huge social and wealth divide between younger Londoners — but the fact remains that saving for a deposit while renting is beyond even those on higher salaries.
The average first-time buyer deposit in London is currently £145,400, more than double the national average of £60,100. London first-time buyers who got help from their parents received £91,356, on average.
“Getting help from parents and family is very much the default when it comes to buying a first home.”
Those who did get help from their parents bought six years sooner than those who didn’t, with an average age of 32 for the haves and 39 for the have-nots.
“The research clearly shows that getting help from parents and family is very much the default when it comes to buying a first home — the vast majority of those who bought their first home in the past five years had help,” says Daniel Copley, consumer expert at Zoopla.
“This shines a light on how hard it can be to go it alone and buy one without this financial backing.“
Not only is there a gulf between those first-time buyers with help from the bank of mum and dad, Zoopla also found a gender gap in the deposit help hierarchy.
Children received £58,000 on average from their parents, but for sons that was over £65,000 on average, while daughters received £13,000 less with an average of £51,671.
“I do feel a bit guilty about this, but I know I’m really privileged.”
The financial blessing also turned out to be a curse for some recipient. Half of the first-time buyers who received help reported that their parents ‘interfered’ with the home purchase, and one in five of those who felt meddled with said they ‘wished they never accepted it’.As for Child, she’s grateful her parents didn’t try to get too involved. “I did do all of the viewings and everything else on my own,” she says. “But I think if they were still living in Essex rather than Dorset they would have wanted to come along, and maybe would have tried to have more of a say, including on the furniture.”
Even though she is in the majority of first-time buyers, the awkwardness over visiting the bank of mum and dad lingers.
“I do feel a bit guilty about this,” she says, “but I know I’m really privileged to have had the help I have.”
