Parents struggling to help offspring on to the housing ladder

Parents helping their adult children on to the property ladder are typically handing over £23,000, often eating into money set aside for their own retirement, according to research from housing charity Shelter.

The organisation said an increasing strain was being put on “the bank of mum and dad”, and that the majority of parents were unlikely to be able to afford to help their offspring, even if they wanted to. It said official schemes such as Help to Buy risked making the problem worse.

However, the government accused the charity of failing to give it credit for the “wide range” of measures it had taken.

The research came 24 hours after the National Housing Federation claimed in a report that home ownership was becoming an “exclusive members’ club”, with today’s typical first-time buyer needing a deposit almost 10 times that required in the early 1980s. That report estimated that two-thirds of first-time buyers receive financial help from their parents.

Shelter said UK parents who were able to contribute towards a deposit gave their children an average of £23,000. It carried out a YouGov poll, which also found that a fifth of parents that had helped their children on to the housing ladder used savings set aside for their retirement or long-term care. Some said they had to cut back on their own day-to-day spending in order to provide assistance.

The charity said offering such large cash sums was not possible for most parents, who were feeling financially squeezed themselves. It said 60% of parents were unable to save any money for their children’s future.

Campbell Robb, Shelter’s chief executive, said: “When parents are having to hand over such vast sums of money to help their children afford a stable home, it is yet another sign that the housing market is spinning out of control.

“A whole generation of young people are working hard and saving hard, but our desperate shortage of affordable homes still leaves them priced out. Instead they have to choose between becoming part of the ‘clipped wing generation’ stuck living in their childhood bedrooms, or ‘generation rent’ paying out dead money to landlords.”

Robb said schemes such as Help to Buy, which provides government-backed mortgages, might be heralded as the solution, “but in reality risk making the problem worse by inflating house prices further”. Other initiatives were needed, such as boosting shared ownership and finding ways to encourage smaller builders back into the market, he said.

Norman Bainbridge, from Southampton, helped both his daughter and son with the deposits for their first homes, but said that while he was happy to help his children, “the nest-egg we had saved for retirement has plummeted. We have had to dig deep into our savings, but at least we had savings to dip into. Many don’t have this option.”

He added: “Without financial help, our children would never have been able to afford their own places. With house prices rising all the time and rent eating up most of their income it would have taken them decades to save.”

Brandon Lewis, the housing minister, said: “Shelter’s report fails to take account of the wide range of measures we have taken which have helped thousands of aspiring homeowners on to the property ladder and got Britain building.”

He added that developers were building more “as a direct result of our Help to Buy schemes” which, he said, had helped more than 50,000 people buy with a fraction of the deposit they would normally require. “Since 2010 we’ve delivered nearly half a million new homes, including nearly 200,000 affordable homes, with plans to invest billions of pounds more in an affordable homes programme which will deliver the fastest rate of affordable housebuilding for two decades.”