More than half of Irish people believe their parents should provide financial assistance to their adult children to enable them to purchase their first home
A survey commissioned by Lotus Investment Group, a Dublin based investment management firm, has revealed that more than half of Irish people, 51%, believe their parents should provide financial assistance to their adult children to enable them to purchase their first home.
The survey, which was carried out by iReach, was conducted on 1,000 people throughout the country and found that 51% felt financial support from their parents was a must. In contrast, 34% of those surveyed said this should be determined on a case by case basis, with a further 15% feeling that it was not a good idea.
Speaking of the survey David Grin, Chairperson of Lotus Investment Group, said: “Property price growth has slowed considerably with the market now close to equilibrium, which is good for buyers. However, as evidenced by recent reports, the fact remains that affordability is still a challenge for thousands of would-be First-Time-Buyers all over the country.
“The Central Bank of Ireland mortgage lending limits continue to preclude some people from taking those first steps onto the property ladder, with recent research pointing to the amount of deposit required as being the biggest stumbling block in many cases. High rents and high property prices are making that elusive ‘10%’ a challenge, as those in their 20s and 30s struggle to budget for monthly expenditures and the savings required,” he continued.
Mr Grin said in some cases parents may feel under pressure to provide financial support to their adult children.
He stated: “This is certainly a delicate topic. While some families are fortunate enough to have the financial means to help their children out if they so wish, there are many others for whom it’s simply not affordable.
“In many cases, sons and daughters would know the finances of their parents and so would never approach them for assistance, but in some cases the financial situation may not be as clear, and parents may feel under pressure to come up with the cash from somewhere – though they too might be finding their finances tight.”
The survey also found that 36% of respondents felt that their parent’s financial future should be taken into account first, while a larger portion of men felt their parents should assist in their first home purchase. 56% of men and 47% of women felt the idea of parental financial support as either great or good.
Mr Grin continued: “It’s also important for these parents to take into account that while they may be managing financially at the moment, they do have their retirement to think about – and it’s important that people don’t end up handing over thousands that they find they themselves might need as their own nest egg when they stop working, and perhaps still have their own mortgage to pay.
“What was also interesting to note from the survey was that a significantly higher number of men (19%) than women (11%) felt their parents should ‘support their children, whenever they can, no matter what’.”
Mr Grin supported the continuation of the Help to Buy Scheme in the upcoming Budget.
“There is definitely merit in continuing with the Help to Buy Scheme, and while home buyers may welcome a loosening of the mortgage lending rules, the Central Bank has intimated that this is probably not on the cards.”
The research also found that in some counties it would take anywhere from 1 to 15+ years for a First-Time-Buyer to save the deposit required.