Parents are twice as likely to offer their adult children a significant sum of money if they knew it would be protected by a formalised loan to be repaid over an agreed period of time, new research by Generation Home has suggested.

When asked how much they would be willing to gift, only one in ten (10%) parents said £10,000 to £50,000. However, this figure doubles to one in five (19%) if they knew the loan was going to be repaid.

The mortgage lender’s findings, based on a study of 1,003 parents over the age of 33, who have children between the ages of 18 and 34, indicated that that parents would happily part with an average of £13,088 to help support their children’s future savings goals – although this amount increases to £22,093 if the money was guaranteed to be treated as a loan.

According to data published by the Office for National Statistics, the average UK house price now costs approximately £277,000 and full-time workers can expect to spend at least 9.1 times their annual earnings to be able to afford a home.

Generation Home’s study revealed that parents are also under pressure from everyday bills and the cost-of-living crisis, with two fifths (37%) open to the idea of gifting financial support but simply unable to do so.

However, the research found that just under half the parents surveyed would prioritise helping with the deposit for their child's first home (46%), compared to 10% for higher education, a wedding, or a car (7%). Overall, two thirds of parents (67%) said they would help financially with 26% happy to gift money without any agreement on how it would be spent.

“With so many factors stacked against first-time buyers amid the backdrop of this year’s even tougher financial climate, it’s easy to think the doors of the property market are completely slammed shut,” commented Generation Home co-founder, Sophia Guy-White.

“Generation Home is committed to helping parents who want to provide financial support but fear the uncertainty of gifting substantial sums of money as a deposit.”

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