FIRST-TIME homeowners in the South East are being gifted more than £61,000 from grandparents to help cover the cost of a deposit.
Data from equity release company, Key, revealed that the “bank of gran and grandad” is hard at work in the region, to help young people buy their first home.
On average, financial gifts made up 95% of a deposit, with only £3,300 coming from the young buyer.
Last year, older homeowners released almost £755 million of equity in order to help younger members of their family meet costs, Key CEO, Will Hale said.
Gifts for house deposits were highest in London at £102,826 and lowest in the North West at £23,467.
Mr Hale said the Stamp Duty holiday on all purchases up to £500,000 — which ends this month — was a major driver in the gifting.
Cllr Lindsay Ferris, leader of the Wokingham Lib Dems, said while the stamp duty holiday helps with overall costs, it doesn’t resolve the barrier to reaching getting on the property ladder in the first place.
Cllr Prue Bray, Liberal Democrat spokesperson for social housing said high household income requirements for mortgages and deposit costs puts buying a house out of the question for many people in the borough.
“Even for a flat in Wokingham is over £51,000 a year, with the average across all property being over £98,000,” she said. “That’s why it is so important to provide more affordable housing, including shared ownership as an option, under which people can buy a share of a house and pay rent on the rest.”
Cllr Bray said the borough urgently needs more affordable housing to rent for people whose incomes will never be high enough to be able to save a deposit in today’s housing market.
“All this is why the Liberal Democrats are committing to maximising the number of 1-3 bed affordable homes to meet local needs in our manifesto for the local elections in Wokingham this year,” she added.
Cllr John Kaiser, executive member for finance and housing at the borough council said providing affordable housing is a top priority for the council.
He called housing a fundamental right, adding the council aspires for everyone in the borough to have a “decent stable home in a thriving community”.
“As a local authority we have delivered one of the highest numbers of affordable homes in England,” he said. “In new housing developments, we require around 35% to be affordable. We have worked with our housing association partners to provide over 1,400 good quality new affordable homes in the last four years and an additional 800 affordable homes will be provided over the next few years.
“Homes that people can afford to live in, with the majority for residents on the council’s housing register.
“We also help those aspiring to get onto the housing ladder offering a part buy, part rent shared ownership scheme. And, we have a strong pipeline of 2,000 affordable homes planned over the next several years.”
He added: “Housing plays a huge role in the health and well-being of all our residents. It is more than just bricks and mortar; housing is about people and communities.”
But Cllr Carl Doran, Labour spokesperson for housing, said first time buyers have already been priced out of Wokingham.
“WBC homeless and waiting list figures show that there is a large number of people in Wokingham looking for cheap one or two-bed accommodation,” he said. “Cheaper than those properties which are available on the market.
“The combination of wage squeezes while house prices have tripled since 2000, has led to a situation where the housing market is effectively unaffordable for new entrants.
“This is a problem that affordable housing was supposed to solve, but it clearly has not.
“That’s down to a planning system that allows developers to get away with supplying pathetically low amounts of affordable” housing and at prices that simply aren’t affordable.
“Slightly less expensive might be a better term for this housing.”
He criticised the borough council for not building affordable housing in its own developments.
“WBC themselves have taken advantage of this planning system in their own developments,” he said. “In the Carnival Pool flats development, the planning authority, WBC, accepted the applicant’s view, also WBC, that there should be zero affordable housing.”
Cllr Doran was concerned that in this week’s budget, the new scheme to underwrite 95% mortgages would make more money for developers, make it easier for career landlords to purchase extra homes, and increase house prices.
“And all this puts housing more out of reach of first time buyers and requiring the Government to come up with ever more ludicrous schemes to pretend everyone can own their own home,” he said.
“We should build council houses rather than let speculative developers build expensive homes to be rented out by private landlords.
“As Shelter have said, a home is the foundation of individual success in life and public house building can be the foundation of national success.”
