Where would we be without our parents?
At a basic level not alive, that’s for sure, but also probably not homeowners either if current trends are anything to go by.
According to new research from the Central Bank released earlier this week, first-time buyers are relying on the so-called ‘bank of mum and dad’ to get a deposit together.
Indeed, one in five new buyers admitted to getting a hand out to help them put the funds together for a down payment on a new home.
According to the Central Bank, the average amount gifted is €10,000 or around half of the funds needed for a deposit.
While this is broadly in line with European standards, it is something of a worry.
Last year prices grew by around 7% and they are expected to have similar growth this year.
While the new help to buy scheme for first-time buyers is welcome, it doesn’t change the fact that for the most part as prices rise so too will the level of deposits required.
With rents also on the rise, it will become that much difficult to get a deposit together – let alone a mortgage – therefore putting more pressure on parents and other family members to help out.
According to the researchers, the average Dublin first-time buyer had a deposit of €50,000 last year with an average of €25,000 outside the capital.
The Dublin rate has been growing since 2012 making it harder for the one third of those between the ages of 26 and 40 who are renting and currently saving for a deposit to finally get a home of their own.
In 2010, first-time buyers represented 53.1% of all household market transactions filed but by last year, first-time buyers’ share tumbled to just 24.4% of the market. At a time when more is being done to encourage first-time buyers, they are finding it more and more difficult to get a home that suits their needs.
Earlier this week the Housing Agency said there was a need for 81,000 new homes between now and 2020. That’s a target unlikely to be reached meaning prices will continue to rise and more pressure will be put on the bank of mum and dad.
Is it fair thought to ask your parents for a dig out?
Let us know your thoughts…
- Have you benefitted from the bank of mum and dad towards a house purchase?
- Should deposit rates be relaxed for those with a history of paying higher rents than the rate of mortgage they would have to repay?
- Are the deposit rates too high?
Have have your say below…