In Q1 1983, the average first time buyer home cost £20,810. However it now stands at £136,842, a massive increase of 558%.
In contrast, the average deposit needed for a FTB to purchase a property in December 2010 was 23% of the asking price or £31,474. Given that this deposit is over £10,000 more than the total value of their parents first home, it is clear that they are facing several challenges.
Indeed, the average FTB who buys without assistance is 37 years old - eight years older than those who purchase with the assistance of their families. However, with inflation hitting 5.1% (RPI) and older consumers worried about how they will pay for their retirement, many families are simply not in a situation to help.
Andrea Rozario, Director General of SHIP, comments:
"These housing figures really highlight the struggle that young people now face to take those first steps onto the housing ladder. House prices have risen far faster than incomes have done since the older generation bought their first homes.
"Furthermore, those who bought homes in 1983 and are now likely to be heading towards retirement will have benefitted from the increase in value of their home.
"They could well look to help their children by releasing a lump sum from their property - therefore providing the funds for an FTB deposit, whilst using the leftover amount to supplement a retirement income for themselves.
"For a lot of people equity release can act as a form of pre-inheritance, an opportunity to pass on their wealth to their families whilst still able to see the benefit it brings. It is important than any and all decisions are taken together as a family and by talking to a financial adviser.
"Whilst equity release is a viable option for many people, it is not necessarily the right one for everyone, and it is important that people seek advice to fully understand it."
