CML concern over parental support

Posted: 05 Jun 2007 12:06:29 GMT

The first-time buyer market could become "polarised" if buyers continue to rely on their parents for funding, it has been warned.

The first-time buyer market could become "polarised" if buyers continue to rely on their parents for funding, it has been warned.

With house prices continuing to rise, albeit at a slower rate, there appears to be no end in sight for the affordability problems faced by many buyers.

This has lead to around 40 per cent of all first-time buyers below the age of 30 asking for financial assistance from their parents, recent figures from the Council of Mortgage Lenders (CML) have suggested.

However, the CML has warned that such reliance could negatively impact the market in the long-term, with parents unable to afford their own home then unable to fund their children too.

"For the foreseeable future, the first-time buyer market looks to be sustained by financial help from parents and other relatives," the CML said.

"It is not clear whether there is any natural limit to the recycling of housing wealth in this way. Over time, however, the market could become polarised - with children of existing home-owners more likely to become first-time buyers.

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