Wednesday 21 August 2019

Irish people back use of 'bank of mum and dad' to buy homes


Using capital from parents to buy a first home in a pricey market is seen as a 'delicate topic'
Using capital from parents to buy a first home in a pricey market is seen as a 'delicate topic'

Michael Cogley

More than half of Irish people believe the so-called 'bank of mum and dad' should step in to help first-time buyers into the property market if parents are financially capable of doing so, a new report has found.

Around 15pc said the involvement of parents in helping their children buy homes was a bad idea, while 31pc said it could only be determined on a case-by-case basis, according to a survey commissioned by Dublin-based Lotus Investment Group.

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Lotus chairman David Grin said that the housing market nearing equilibrium was "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," he said.

"High rents and high property prices are making that elusive '10pc' a challenge, as those in their 20s and 30s struggle to budget for monthly expenditures and the savings required."

Grin described the use of capital from parents as 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," he said.

"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."

Lotus is one of a number of companies that lend money to developers to build homes. The company's chairman backed the continuation of the Government's help-to-buy scheme next year.

The Vat rebate for first-time buyers is still under consideration by Finance Minister Paschal Donohoe.

The report found around 19pc of men felt that parents should support their children no matter what, compared with 11pc of women.

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