Baby Boomer success increases children’s chance of moving up the housing ladder
- Children of early Baby Boomers (those in their 40s) see the biggest increase in the use of Gifted Deposits since 2014.
- Homemovers in their 30s (children of Generation X) see biggest decrease in usage of Gifted Deposits, by almost 3%, with parents less likely to be able to gift a deposit.
- Affordability still a key obstacle, suggesting that Baby Boomers will continue to support their children and grandchildren for another 10-15 years.
New research from My Home Move suggests that second-steppers, the children of the Baby Boomer generation, are benefitting more from Gifted Deposits, as their parents enjoy the benefits of having bought a property at the right time.
Homemovers in their 40s, whose parents are most likely to belong to the Baby Boomer generation, account for almost 3 in 20 transactions using a gifted deposit. (See Chart 1)
Commenting on the findings, CEO of My Home Move Doug Crawford, said:
“It’s not surprising that we are seeing more people using a gifted deposit in their 40s, especially as we know from our own research that there is a ‘missed generation’ of first-time buyers within the age bracket.* We’ve spoken previously about how the number of second-steppers turning to gifted deposits speaks to a lack of affordable housing or options for people wanting to move into bigger homes. Luckily, their Baby Boomer parents have benefited from the peaks and troughs of the housing market, so are more likely to be in a position to help their children move into their dream homes.”
While those in their 20s were the only other age group to see an increase in Gifted Deposit use, the number using a gifted deposit to purchase a Leasehold property has declined by 3.1%. In contrast, those in the 40s and 50s saw a 0.24% decrease and 1.97% increase respectively. (See Chart 2)
Continuing, Doug said: “Leasehold properties are often specifically aimed at helping first-time buyers onto the market, such as Shared Ownership or New Build homes. However, when you consider that the parents of today’s first-time buyers would have been born in the 1960s/70s, it’s no surprise that Gifted Deposits may not be an option for these would-be homebuyers to explore. Their parents would often have jumped onto the market when prices were peaking, meaning they were unable to build as much equity in their property as the previous generation and won’t necessarily have the additional savings or income to be able to gift a deposit.
“What is clear is that affordability is still a key issue in helping the market move. With second-steppers and middle-movers still reliant on gifted deposits and having to turn to properties that should be prime for first-time buyers, it’s clear that taking the next step is becoming increasingly difficult without the help of others. As previous generations have clearly learnt, jumping onto the ladder at the right time so that equity can build over time is the only sure way of making sure your next step is easily obtainable.”
Kindly shared by My Home Move