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Parents chip in to help home-buyers
Parents are contributing around 17,000 pounds to help first-time buyers raise the deposit typically needed for a mortgage, Shelter said
Parents are collectively paying out £2 billion a year to help their children on to the property ladder, a housing charity has found.
The "bank of mum and dad" contributes around £17,000 to help first-time buyers raise the £28,000 deposit typically needed, equating to £2 billion added to the UK housing market each year from parents alone, Shelter said.
The yearly estimate is almost double the average of £1.1 billion spent annually by the Government on its affordable homes programme in England, according to the charity.
Shelter said the findings show that the younger generation's struggle to get on the property ladder is still putting a strain on parents' finances, despite recent Government schemes to unblock the housing market and give people with smaller deposits a leg up.
More than a quarter (27%) of first-time buyers are still reliant on parents to help them raise a deposit, compared with less than one fifth (17%) before the financial crisis struck, according to the findings.
One fifth of parents said they had been forced to save less for their retirement to help fund their children's mortgage deposits and one quarter were cutting back on their own spending.
The Government has introduced schemes such as NewBuy and Help to Buy to specifically help people with smaller deposits saved up, alongside its Funding for Lending scheme which has significantly boosted mortgage availability by giving lenders access to cheap finance to help borrowers.
The Council of Mortgage Lenders (CML) recently reported that first-time buyer numbers lifted in May to their highest levels in five-and-a-half years.
Help to Buy will be fully launched next year and will see the state offering guarantees to enable £130 billion of low-deposit mortgage lending. But with house prices already rising faster than expected this year, concerns have been raised that the scheme could fuel a property bubble and encourage people to over-stretch their finances.
But Campbell Robb, chief executive of Shelter, called for the Government to do more to fix the "broken housing system".
He said: "The fact that the bank of mum and dad has to play such a central role in our housing market shows just how desperate the situation has become for a generation that's priced out of a home of their own. Something is seriously wrong when people who work hard and save each month still have no hope of buying a home without significant financial support from their parents."