The number of investors using gifted deposits, a sum of money that is given by a family member forming all or part of a deposit for somebody wanting to buy a property, has dropped by 3% in the last two years, new figures show.
The research from My Home Move has revealed that investors accounted for 4.1% of clients using a gifted deposits between June 2016 and July 2017, a decrease of 2.5% compared to the corresponding period in 2014/2015.
There has been an even larger 5% decline in the number of first-time buyers using gifted deposits in the last two years, although it is worth noting that 88.9% of all gifted deposits are actually used by second-steppers and middle-movers.
Overall use of gifted deposits has stabilised following a peak in the run up to Stamp Duty Land Tax (SDLT) changes.
Commenting on the findings, CEO of My Home Move Doug Crawford, said: “What is particularly interesting is the drop in Gifted Deposits to first-time buyers. We know that affordability is a key issue for first-time buyers, particularly as 55% of them are looking to buy properties costing less than £150,000, which gives them roughly a 1% chance of finding a suitable property.
“With gifts to this group falling steadily, it does beg the questions as to whether this is reflective of a drop in the number of first-time buyers entering the market, or whether there are other factors in play.”
“We already knew that the main beneficiaries of gifted deposits were people that were already on the property ladder, but the data seems to suggest that these second-steppers and middle-movers are in more and more need of help to make it onto the next step,” he added.
Source: My Home Move