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Over 40% of parents can't afford to help offspring buy a home

Some 41 per cent of parents are not in a position to provide any financial support towards helping their child get on the property ladder.

A report by Post Office Money reveals that those parents are, however, contributing in other ways such as letting their prospective first time buyer offspring live at home for free, or charging just a token rent, or by providing free childcare.

According to the report - using data from Opinium Research and the Office for National Statistics - the parents of so-called millennials have an average financial wealth of £52,746 across the UK, rising to £70,704 in London.

If they choose to assist their child’s home purchase, on average they can afford to use 35 per cent of this wealth - equivalent to £18,396 or a third of the average deposit for a first-time buyer in the UK.

Although the overwhelming majority of parents want to offer financial help to their children to buy, only five per cent say they can afford to make a financial contribution to the value of £50,000 or more, which is equivalent to the average UK deposit for first time buyers. 

Of those that have provided financial assistance to their children, 59 per cent gifted the support and 40 per cent offered the money as a loan. 

Parental support can significantly reduce the average amount of time millennials can expect to save for a deposit, the report found.

Outside of London and the south of England, parental assistance can help reduce the time it takes to save for a deposit by more than half. In London and the south, it’s apparent that homeownership is only possible either much later in life when incomes are higher, or with above average parental help.

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