UK Markets closed

First-Time Mortgage Seekers 'Rely On Parents'

(c) Sky News 2012

More than 60% of hopeful first-time house buyers are graduates still living at home and increasingly reliant on parental help for a deposit, a study has suggested.

Researchers found that graduates trying to get on the property ladder were living with their parents rather than moving into the rental sector, which has seen rents soar due to high demand.

According to the poll by Rightmove (Other OTC: RTMVF.PK - news) , 30% of university-educated would-be buyers said they expected financial family help in buying a home, compared with a quarter of non-graduates.

The study found 40% of graduates still live at home, along with 21% of post-graduates.

It said 'grads' hoping to get on the property ladder in the next year had built up a deposit of around £35,000, compared with £25,000 for people without a university degree.

Miles Shipside, director of Rightmove, said: "Joining the world of work straight from school may start your earning career a few years earlier, but in the current housing market it seems the downside is that it may delay being able to satisfy your home-ownership aspirations."

The average age of a graduate prospective first-time buyer is 30, compared with a slightly older average age of 32 for a school-leaver and 33 for post-graduates.

Around 27% of those planning to buy a home in the next 12 months will be doing so for the first time, an increase on 23% a year ago - but still down on the 40% level typically seen before the credit crunch.

Would-be first time buyers have faced a huge struggle to buy their first home, due to the shrinking availability of low-deposit mortgages and lenders' tightened borrowing criteria.

Many mortgage providers now demanding 20% deposits rather than the 5% to 10% typically needed five years ago.

Mr Shipside said: "It seems some return to the family home for cheaper accommodation, and then some are helped by a withdrawal from the family coffers to assist their final exit.

"Whether it's a parting gift or a parting shot to get them to finally leave the family nest, it helps them both raise a higher deposit and means graduates buy their first home younger than 'non-grads.'"

More From Sky News