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Guest blog: "The Bank of Mum and Dad can't solve this housing crisis"(77 Posts)
This week, the housing charity Shelter published new research which shows that parents pay out a staggering £2 billion each year to help their children into a home of their own.
Here, Shelter's Chief Executive Campbell Robb argues that unless something changes, our children will face a huge struggle to get a stable and affordable place to live.
Are you worried about how your children will be able to afford a home of their own? Let us know what you think here on the thread - and if you blog about it, don't forget to post your URL.
"As a parent I know that doing the best for your kids is always the number one priority. But while you can offer endless amounts of love and support, these days financial support from 'The Bank of Mum and Dad' is becoming almost as important if we want to see them get on in life.
This is increasingly true when it comes to where they'll live when they grow up, and have families of their own. Things have changed massively since I was a young adult. We were able to buy our first home in our 20s, with a deposit of just £4,000. Now, the average deposit is seven times that amount, while house prices have risen so fast over the past 40 years that buying a chicken would cost £51 today if food prices had gone up at the same rate. Saving for a deposit on a first home can take up to three decades in some parts of the country. And at Shelter, I hear first-hand from young people who say that no matter how hard they work or save, they're still priced out.
The knock-on effect of this is that more and more young couples have no choice but to bring up their children in unstable rented housing or put off having kids altogether while they try and save up. Alternatively, they're living at home until their 30s - unable to move out and live independent lives. I'm really worried that unless something changes, the housing situation my daughters will face will be even worse.
None of us wants this for our children, so it's not surprising that more parents are offering to help out. Our new research shows that the number of people relying on help from parents to raise a deposit is rising fast. And we're not talking about a few hundred or even a few thousand pounds: the average contribution was £17,000, which adds up to a staggering £2bn in cash being adding into the housing market each year by parents alone. I don't know about you, but on top of all the other costs parents face I find the prospect of raising that sort of money for even one of my children pretty eye-watering. With the squeeze on family budgets getting tighter, the reality is that the majority of parents simply can't afford it.
All this goes to show that relying on the Bank of Mum and Dad to get young people into a home of their own just isn't a sustainable solution to our housing crisis. If our kids are to even have a chance of a home of their own, the government has to start meeting people half way. This doesn't mean more schemes that help a handful of first time buyers - it means addressing the problem that's at the root of all this: our desperate shortage of housing. After all, this is what's driven house prices up and pushed homeownership further and further out of reach. Yet last year the Bank of Mum and Dad spent more on helping children with deposits than the government spent on building affordable homes.
We have to get a grip on this problem, and we have to do it now. More good quality affordable homes in every community is the only way to make sure our children can get a home of their own. What's more, it would ease pressure on the rental market and bring down housing costs for families at the sharp end of our housing crisis who are fighting a daily battle to keep a roof over their head. These are the people Shelter see's every day, and works hard to stop from becoming homeless. It's all interconnected ' more homes will ensure everyone in our society has a decent, affordable place to live.
The government must join parents now and start investing in our children's futures by building the homes we need."
You can find out more about Shelter's campaign - and use their work use their online calculator to work out how long it will take your children to save for a deposit - over here.
I know I am very lucky, in that my parents had the foresight and funds to buy a house while I was at university and sell it to me three years later in 2005 for the price they paid. As it had gone up in value in that time I didn't need a deposit and was able to get an interest only mortgage which I could just about afford on my very average graduate wage. It cost my parents nothing except the surprise tax bill (oops). And now I have moved up the ladder to a lovely home with my husband who also did ok out of the property boom. It helps that I live in the north too.
However if you compared the way I lived my life to the teen and twenty somethings now, I lived very meagerly. I didn't get a manicure or a decent hair cut until I was employed and earning my own money. I didn't go on expensive holidays. I had a cheap CRT tele until 2009 and only got sky tv recently. Most of my furniture was hand me down- still is in fact. These are just small examples but you get the picture. I see Teens and twenty somethings spending fortunes getting their nails done, hair done, spray tans, new outfits every weekend etc, etc-they all have the latest gadgets etc. they are living off bank of mum and dad in a different way - a way which I never did.
This generation has no clue how to save or live on a budget. I am not saying they don't have it more difficult than I did - clearly they do but they don't help themselves.
Bodicea - have you considered that perhaps twenty somethings realise that owning their own home will be completely out of the question for a lot of them and they probably wonder why should they save?
I think a lot of them have probably given up the idea and think they may as well spend what money they have.
It's a dreadful state this country is in due to high house prices.
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