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Young people need inheritance to buy homes

Inheritance is looking increasingly like the only way for many young people to get on the property ladder, according to new research

 

Housing and homeless charity Shelter asked 4,000 people, 1,000 of whom were parents.

It found almost 48 per cent of the mums and dads surveyed said they “strongly agree” or “tend to agree” that the inheritance windfall left by them will be the only way their children will ever be able to afford a house.

The study also found that one in six people aged between 25 and 34, who are already on the housing ladder, have relied on inheritance from a relative in order to do this.

Nearly one third used cash gifts for a deposit.

The charity highlighted the case of a 28-year-old man named Richard, who works at a university and is living with his parents in Essex.

Richard said: “I hate the thought that losing the people I love most in the world could be the only chance I’ll have to buy my own home.”

With house pricesoutpacing wage increases, it is becoming increasingly unaffordable for many people.

According to property website Rightmove, the average UK house costs around £286,133, beating a peak reached last June.

Last week, the Royal Institution of Chartered Surveyors (Rics) said that it was seeing “worrying” signs of an upward pressure on house prices.

Government figures recently showed that in England, people aged between 25 and 34 are now more likely to be renting privately than buying.

Data shows the proportion of young people in this age group who are privately renting has more than doubled since 2003/04, with almost 48 per cent of households renting privately in 2013/14.

Chief executive of Shelter, Campbell Robb, said: “No parent wants to think the only way for their children ever to own a home of their own is through losing someone they love.

“It’s a tragic consequence of our housing shortage that, even when they are working hard and saving what they can, a generation of young adults have no choice but to rely on the prospect of inheritance to have any hope of buying their first home.”

Last month, the Council of Mortgage Lenders (CML) said it had seen evidence that mortgage support schemes like Help to Buy are making people less reliant on the “bank of mum and dad”.

Figures from the CML show more than 300,000 home loans were handed out to first-time buyers during 2014, the largest number seen since 2007. 

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