First-time buyers moving back home to save for a deposit are costing their parents thousands in retirement savings, new research has revealed.
According to specialist bank Aldermore, aspiring first-time buyers moving back to save for a deposit are costing parents an average of £5,000 a year extra on food and drink, petrol and electricity bills.
Worryingly for parents, this means they are having to sacrifice saving for retirement in order to cover the additional costs of their children returning back to the nest.
Charles McDowell, Aldermore’s commercial director of mortgages, said: “As parents are less able to save for their retirement, more people will require help to unlock the value held within their property in later life.
“This is an intergenerational problem that goes beyond the simple view of the Bank of Mum and Dad.”
More than one in five (22%) aspiring first-time buyers are currently living with their parents and a quarter (26%) say they will have to live with their family for five or more years to save for a deposit.
Not only is this impacting heavily on parents’ finances (42%), it’s also taking its toll emotionally and psychologically.
With their child living at home, nearly one in three (31%) feel like they don’t have the freedom they could have, whilst a further third (31%) believe the situation is negatively impacting the relationship with their child.
Furthermore, a third (33%) believe it is negatively impacting the relationship with their partner and over a quarter (28%) are waiting impatiently for their child to move out.
It is also having a negative impact on the Boomerang Generation itself with almost a quarter (24%) of aspiring first-time buyers saying that still living with their parents makes them feel like a child.
McDowell said: “First-time buyers have a notoriously difficult time getting on the property ladder. Since saving an adequate deposit remains the biggest obstacle, more and more people have had to move back into the family home to boost their savings.
“Low levels of confidence amongst this group will have ramifications further up the housing chain so it’s imperative that more support is offered. We know that first-time buyers are relying on the new government to provide much needed solutions but following the recent general election, housing policy is likely to be reviewed again under the newly appointed housing minister, meaning it remains more uncertain than ever.”
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