Graduates can't buy a house without mum and dad

Graduates need mum and dad's help to buy a home (photo: pixmedia)

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Friday, 10, Feb 2006 08:49

The bank of mum and dad has come to the aid of more than half a million graduates in the last five years, to help them buy a home.

Research by Scottish Widows Bank reveals that one third of graduate first-time buyers have had to rely on a gift from their parents to fund their initial deposit.

This is despite many of them living at home - often rent free - when they first leave university and get a job.

More than a quarter of non home-owning graduates who left university within the last two years lives with their parents rent free, while almost one in ten graduates who left university five years ago still live with their parents rent free.

"It is clear that there is an ongoing struggle for graduates to take that first step onto the housing ladder and, with house prices at historically high levels, it's not getting any easier," said Scottish Widows Bank's Murdo McHardy.

"Even those graduates that have been working for several years are forced to borrow money from their friends and family."

The boom in house prices over the last ten years means that many graduates no longer see buying a house as a realistic prospect in the near future.

One in 14 graduates who do not own their own home has got married before any other major life event, while one in seven graduates thinks they will get married before buying their own home.

Mr McHardy added: "It is interesting how much people's attitudes have changed in the past few years. It was not long ago that people would buy a house as a priority in their early twenties. Having children and getting married seem to be a less daunting prospect for many graduates than buying a house when in reality it is much more accessible than they may think."

Other options open to graduates include getting 100 per cent mortgages and asking their parents to act as guarantors to their mortgage.

Among the initiatives that graduates say would help them to get on the housing ladder are not needing a deposit, lenders lending more than three times their salary, taking future earning potential into account, and student loan debt not affecting the lenders' decision.

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