‘Inheritance needed’ to buy homes

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Published: Tuesday 21st April 2015 by The News Editor

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Nearly half of parents whose children have not bought a home think their only hope of getting on the property ladder is to wait for an inheritance from them, according to research from Shelter.

Some 49% of more than 1,000 parents surveyed for the charity said they “strongly agree” or “tend to agree” that the inheritance windfall left by them will be the only way their children will ever be able to get on the first rung of the property ladder.

Further research among people aged between 25 and 34 years old who have been able to buy their own home found that one in six of them had relied on inheritance from a relative in order to do this – and nearly one third used cash gifts for a deposit.

In contrast to the younger generation, just one in 20 people aged 55 and over said they had used an inheritance to buy their first home.

Shelter highlighted the case of a 28-year-old man named Richard, who works at a university and is living wth his parents in Essex.

Richard said: “I hate the thought that losing the people I love most in the world could be the only chance I’ll have to buy my own home.”

The findings came after property website Rightmove reported that house sellers’ asking prices across England and Wales reached a new record high of £286,133 in April, amid a lack of choice for home-buyers. The Royal Institution of Chartered Surveyors (Rics) also said last week that it was seeing “worrying” signs of an upward pressure on house prices.

Government figures recently showed that in England, people aged between 25 and 34 are now more likely to be renting privately than buying their own home.

The proportion of young people in this age group who are privately renting has more than doubled since 2003/04, with almost half (48%) of all households where people are aged 25 to 34 renting privately in 2013/14, according to the data.

Over the same 10 years, owner-occupation levels in this age group have fallen from 59% to 36%, according to the English Housing Survey.

Campbell Robb, chief executive of housing charity Shelter, said: “No parent wants to think the only way for their children ever to own a home of their own is through losing someone they love.

“It’s a tragic consequence of our housing shortage that, even when they are working hard and saving what they can, a generation of young adults have no choice but to rely on the prospect of inheritance to have any hope of buying their first home.”

Mr Robb said successive governments have failed to build “anywhere near enough affordable homes”.

With the General Election looming, he urged politicians to “give back hope to the priced-out generation” by making a “real and lasting commitment to building the affordable homes we desperately need”.

The Council of Mortgage Lenders (CML) recently said it has seen evidence that mortgage support schemes like Help to Buy are making people less reliant on the “bank of mum and dad”.

The CML has estimated that almost half (48%) of people taking their first step on to the property ladder last year did so without needing extra cash from relatives such as parents and grandparents.

This marks a significant increase compared with the 34% of first-time buyers who were thought to have got into the market in 2011 without needing added help in raising their deposit.

More than 4,000 people from across Britain took part in the research for Shelter’s study.

Published: Tuesday 21st April 2015 by The News Editor

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