Careful Consideration Is Needed

It is well known that the “Bank of Mum and Dad” often plays a critical role in helping young adults take their first steps onto the housing ladder. However, a recent survey has revealed the significant emotional and financial strain this support places on families across Britain today. Parents with adult children understand the importance of homeownership but are increasingly weighed down by feelings of guilt, worry, and financial anxiety over their inability to provide the level of assistance they wish they could.

Emotional and Financial Implications of Parental Support

The emotional burden on parents assisting their children with home purchases is considerable. Many parents feel guilty about not being able to do more, with over half of homeowners with adult children having either already provided or expecting to provide financial assistance. These concerns stem not only from a desire to help but also from a fear of long-term financial consequences for themselves.

The strain is especially evident among parents who feel anxious about their children's ability to purchase property without support. As property prices rise and wages stagnate, the dream of homeownership feels increasingly out of reach for many young people. For parents who want to help but face financial limitations, this reality creates a sense of helplessness and guilt.

Different Ways Parents Are Supporting Their Children

The survey highlighted the variety of ways parents are assisting their children. Some are acting as guarantors on mortgages, while others are allowing their children to live rent-free at home to save for a deposit. In fact, 59% of parents expressed worry about their children’s chances of owning a home, and 50% of those with adult children who don’t yet own a property wish they could offer more financial support.

The traditional route of gifting a deposit may not be feasible for every family. Instead, many parents are finding alternative ways to help, whether by reducing their own living expenses, taking out loans, or dipping into savings and investments.

Guilt and Financial Expectations

As the housing market becomes increasingly difficult to navigate, parents are feeling immense pressure. More than a quarter of parents feel guilty about the level of financial support they can provide. This guilt is compounded by the fact that many parents expect this assistance to directly impact their own financial situation.

Among those who foresee offering financial support, 28% anticipate dipping into their savings or investments, which has led to concerns about their long-term financial security. For some parents, this means worrying about having enough funds for their own needs, particularly if they require long-term care later in life. Around 13% of parents are concerned about not having enough money for retirement, and 10% worry about the possibility of financial insecurity in the face of unforeseen health or care needs.

Long-Term Consequences for Parents

The sacrifices parents are making to help their children get on the housing ladder are significant. For instance, 9% of parents anticipate needing to delay their retirement, while another 9% are considering downsizing their homes in order to continue providing financial support. These choices highlight the long-term emotional and financial toll on parents who are determined to ensure a better future for their children.

Ultimately, the rising costs of homeownership in the UK have not only placed pressure on young adults but also on the parents supporting them. As the role of the "Bank of Mum and Dad" becomes more ingrained in society, it’s crucial to acknowledge the strain this places on families and the difficult decisions parents face when balancing their children's needs with their own financial well-being.

If you find yourself struggling with the pressure to support your adult children, it’s important to explore all the available options and seek professional advice before making major financial decisions.

There are several new lending options that allow parents to support a dependents mortgage application; not just through the gifting of deposit monies. We are here to help and guide you through this.

Your home or property may be repossessed if you do not keep up repayments on your mortgage