Your friend has bought a house. You’re in your 20s, or perhaps your early 30s, and because you’re not part of the wealthy elite, this seems unusual. The country is in the midst of a housing crisis that has seen home ownership plummet among younger people. Perhaps you’ve been trying to save, but what with the cost of living and the money you’re spending on rent, you’re not getting very far.

Then you see your friend’s smiling face on social media as they brandish their new keys. Perhaps they invite you round for drinks to celebrate moving in. And you’re happy for them, of course. But also you can’t help but wonder: how much money did their parents give them?

The so-called bank of Mum and Dad has become, for many millennials, the only route into home ownership. A report from Legal & General predicted that parents will lend more than £6.5bn in 2017 to help their children buy a home, a 30% increase on last year. All in all, the “bank” will support the purchase of £75bn worth of property, making it the equivalent of a top 10 mortgage lender; the average amount of money provided is set to rise to £21,600. The Social Mobility Commission reports that 34% of first-time buyers had help from their families, an all-time high.

But this source of funds is available to only a fortunate few. My own parents, for example, don’t have £21,600 to give me, not that I would ask. My mum is on a low wage and in rented accommodation, and my dad and stepmum work part-time due to ill health. I’m 30, newly married and live in a shared house. For the last couple of years, my husband and I have been saving hard, and I’m proud of how much we’ve put aside, but the price of rent, coupled with unstable employment, means that owning – even outside London – still seems a long way off.

And I’m not alone. The proportion of young people embarking on home ownership has fallen significantly in the past 20 years. According to the Social Mobility Commission, in 1990 almost 40% of 20- to 24-year-olds bought their own homes. By 2010, it was 13%. Those aged between 25 and 29 fared slightly better, but the figure still fell significantly, from 63% to 34%, in the same period.

Laura Morris, 31, is one of the lucky ones. A hospital doctor in Liverpool, she bought her three-bed terrace house with her partner, a journalist on a regional newspaper, in January. It was £130,000, with a 10% deposit. This would not have been possible without parental help. “Each set of parents gave us £2,000 as a gift,” she says. “My parents also loaned me £2,000.” The couple had already been saving. “It’s been hard. We haven’t lived in extravagant places or anything. Rent is just throwing money away; at least now we are putting money into something.”

Laura has mixed feelings about the help she received. “It was very generous, but you don’t feel you should be in that position,” she says. “I’m very conscious that I’m in a job that pays well above the average, and there are lots of people who are in much harder situations. It doesn’t feel like a comfortable situation at all. It’s so different from our parents’ generation.”

Katie Murphy, a 28-year-old NHS administrative assistant, also from Liverpool, bought a flat in 2014 for £72,000, with a parental gift of £7,200 (she has since sold that flat and bought another with her boyfriend). She says that when her parents first offered the money, she wasn’t sure about taking it. “I felt that it was too much and that they should spend it on something else,” she says.

Katie’s mum, Valerie, is 53 and retired. She spent her working life in local government and the civil service, while her husband, Tony, retired this summer after working as a quantity surveyor. Both have done well out of the housing market and used the money to help their daughters (Katie’s sister lives in London and they contribute to her rent). “Tony and I married when I was 32 and he was 28, and we already each had a house,” Valerie says. “The first property I bought was in 1987, in Milton Keynes. My father gave me some money towards a deposit. I wouldn’t have been able to buy the flat without that gift.”

After selling her house and living in Tony’s, they bought their current five-bedroom home – which Valerie says is now too big for them. They plan to downsize next year. They also own a cottage, which they rent out 95% of the time as a holiday let, and an apartment in a converted school, which has a long-term tenant. “These rentals, money left to us by our parents, and Tony’s job have enabled us to help the girls financially,” Valerie says. Property, she says, is a good investment; she is keen to emphasise that none of her properties is left empty.

“We didn’t want Katie to be renting, which we saw as a waste of money,” Valerie says. “Basically, if you are renting, you are paying someone else’s mortgage.” She and Tony can’t do as much for their other daughter in London, though. “All those prices are beyond anything we could help her with.” As of August 2017, the average house cost £225,956, according to the UK House Price index; in London, that figure rises to £484,362. Is an even wider gulf opening up in the south between the haves and the have-nots?

‘For most people, getting on the property ladder is miles away’: Sara and her mum, Sharmila. Photograph: Karen Robinson/The Guardian

Jenny, 28, certainly thinks so. An events organiser who grew up in Hitchin, Hertfordshire, she bought a two-bed flat in south-east London just under a year ago, after living with her parents following a relationship breakdown. Her flat cost £300,000 and the £150,000 deposit was given to her by her parents after her father, who worked in pharmaceuticals, received a large redundancy payout. Without their help, she says, she could never have afforded to buy.

“It’s such a huge amount of money that I’d never be able to repay them,” Jenny says. “Not that they’d ever ask me. I felt a burden to make sure I found something amazing, and to show them I was being responsible in other ways, because I was still living with them. I wanted to make sure I wasn’t being frivolous at weekends. There’s a lot of guilt about it, not just towards them but towards friends of mine.”

Jenny says she feels a divide widening between those of her friends who have been able to buy and those who can’t. “We all live in London, and most of them are not in this position. Some are obviously pleased for me, but there are some whom I can’t really talk to about it, who have made remarks: that I’m part of the problem, that I’m propping up the housing crisis, and how lucky I am and how I don’t know how hard it is. I’ve rented privately for six or seven years – I know how crap it is.”

She seems upset, and tells me she has lost one friend because of it. “There’s definitely a divide now, a sense that I think I’m better than them.”

Owning her own place is also awkward when it comes to romance. “You meet someone and they’ll be like, ‘Do you want to come over? My housemates might be in.’ It’s not the same for me: ‘Well, you can come to my flat.’ Then you feel like you have to justify it. Whichever way you do, they’re going to think you’re Miss Moneybags.”

Like all the parents I speak to, Jenny’s dad, Max, 57, recognises that things are much harder for today’s cohort than his own. Jenny’s flat in Sydenham is just down the road from the first house he and his wife bought, in Penge, in 1987. That was a three-bedroom terrace house with a £60,000 mortgage. “Now those properties are going for well over half a million pounds. I must admit that when I first saw the flat [Jenny chose], I thought, ‘Crikey, you’ve spent all that money for this?’ Jenny told me that even with £150,000 cash, she was laughed out of some estate agents.”

Max grew up on a council estate in Watford and describes himself as “left-thinking”; he is unhappy about the current state of affairs. “We’re staring down the barrel of 30 years of underinvestment in housing, social as well as private,” he says. “The whole housing policy of successive governments has really been negligent, which has led to the crisis that this generation is facing.”

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A recent LSE report on home ownership and social mobility demonstrates how the relationship between your parents’ class and income and your own has become more and more entwined. “The ability of young people to get on the housing ladder is determined much more by whether their parents own their own home than it was a generation or two ago,” says Lindsay Judge, senior research and policy analyst at thinktank the Resolution Foundation. “Roll that forward, and it has pretty dire consequences for social mobility.”

We're obsessed with home ownership. If we changed to a European renting model, people like me could live at a lower rent

As for help to buy, the government scheme launched in 2013 that was supposed to help first-time buyers struggling to get a deposit together, it is in fact mostly used by higher earners. About 4,000 help-to-buy loans issued last year were handed to those earning £100,000 or more. The government has just announced that it will invest another £10bn in the scheme.

So what about families where parents cannot help their children? Alex, a 29-year-old quality assurance auditor, lives in Crystal Palace, south-east London. Her father was a Church of England priest, but has now retired for health reasons, and her mother works at Waterstones on the minimum wage. They are renting privately, as is Alex.

“I love London,” Alex says. “I’ve made this my home. I’d love to continue being here, but on a £35k salary, what would I have to get in terms of a mortgage? It would be 10 times my salary… it doesn’t figure in my equation.”

Alex is resigned to not owning a home, and says she prefers it that way. “In this country, I think we’re obsessed with home ownership. I would rather be in a situation where I could rent for life. If we changed to a more European renting model, that would allow people like me to live at a lower rent.” I empathise with Alex. I, too, would be happy to rent were the sector more affordable and able to offer more stability. It’s the fact that renting is so hard that makes home ownership so appealing in the first place.

Alex thinks her parents would like to help “more than they’ve been able to, but I hope I’ve been able to reassure them that that’s OK”. At this point, she is more concerned about her parents’ future than her own. “You worry for them, when it comes to retiring, how they’re going to support themselves. Am I going to be able to do something to help? At the moment, I’m not in a position to.”

Alex’s parents are a reminder that not all baby boomers are sitting on piles of cash. What does it feel like to struggle financially, yet to want desperately to help your grownup children find some semblance of stability?

Sharmila is 50, lives in Leeds and has three children. One, Sara, 27, bought a £400,000 house a few months ago in Hertford, thanks to her girlfriend being made redundant. Though she earns a “good” salary, Sara still felt priced out and didn’t see ownership as being on the cards, especially because she uses what spare cash she has to help family members, including her mum.

Dominic Lee and his girlfriend Laura were helped to get on the property ladder by a legacy left to his mother, Amanda. Photograph: Andy Hall for the Guardian

“I don’t know a single person who had this bank of Mum and Dad,” Sara says. “This might be me being a little bit bitter. It’s amazing if you have that, but a lot of people, the majority, do not have that safety net. For those people, the reality is that getting on the property ladder is miles away.”

Sharmila is in a low-wage job as a support worker and did not contribute to Sara’s deposit. Having had an arranged marriage at 16, Sharmila found herself homeless with a child at 17. She raised Sara and her brother and sister as a single parent and spent much of her career working for the local council. She was laid off in 2009 with no redundancy pay.

“My father was brought over by the British government in the late 1960s/early 1970s as an economic migrant labourer from India,” Sharmila tells me. “He wasn’t able to pass anything on to his children. I have found it extremely difficult to save any money. There are peers around me who are helping their children get on the ladder. My children come to tell me, ‘My friend’s bought a house and their parents have helped them.’ It’s not pleasant as a mum to hear that.”

For Sharmila, the help is flowing in the other direction. Sara sends her money towards electricity and her mortgage. Sharmila was able to buy her council house, but has an interest-only mortgage.

Right to buy is, of course, one of the reasons that there is such a shortage of affordable housing. Many of the flats that first-time buyers are able to afford are former local authority properties that have been sold off. Sharmila is conflicted about this: “I can see both sides. I don’t think it should be sold off, but it was the only way that I would be able to buy my own house. It means a lot.”

Dominic Lee, a 29-year-old primary school teacher based in London, also lives in what used to be social housing. Thanks to some money that his mother, Amanda, 59, inherited from her father and passed on to her three children, and some money from his girlfriend Laura’s parents, he was able to buy a former council flat in Forest Gate for £297,000, using the help-to-buy scheme and a £64,000 deposit.

“It’s eye-watering,” he says. “We had to scramble for a lot of additional cash to pay for extra costs. We both felt at the bottom of the ladder, almost not entitled to a house. We really had to scrimp and save.” The money from the couple’s parents was in addition to their own savings – Dominic lived with his mother in Somerset for 18 months while teaching, and saved during this time. “There’s a perception with my friends outside London that I’m an instant millionaire now,” he says. “They think if you have a property in London, you’re probably a dodgy oligarch or have five properties. There is a little bit of resentment.”

If you aren’t owning by 40, you’re probably never going to get on the ladder – barring inheritance or a stroke of luck

The resentment goes upwards as well as sideways, he says, the baby boomers’ generation “could get a three-bed house on one salary with a 5% deposit or whatever. Everyone’s pitted against each other.” That includes his parents’ and grandparents’ generations: “The baby boomers look at the older generation and think, ‘That’s going to pay for the extension or pay off the mortgage when they die.’ Everyone’s waiting for someone to die.”

Dominic’s childhood was hand-to-mouth, he says. His mother was a single parent on a low wage as a teaching assistant, and struggled to pay her own mortgage. She gave him £24,000 after her father died. “I had no savings,” Amanda says. “I’m a very low-income earner. I’m almost 60, and hadn’t got much pension provision, so there was part of me that thought I could keep that for retirement, but basically it was my only chance to help. There was no way they could have saved while renting.”

Like many of those who have bought or helped their children to buy, Amanda feels conflicted. Dominic’s flat should never have been sold off by the council, she says, and should have been kept for people who really needed it. She laments the lack of stability in the rented sector, too, where you can be kicked out at a moment’s notice. Most of all, she wishes that more young people could afford their own homes. “It shouldn’t be left to a lottery. It’s unfair that I have been able to give them an advantage that other young people don’t have. That doesn’t sit comfortably with me.”

What will happen to the generation suffering under this system remains to be seen. “The big question is, will today’s twenty- and thirtysomethings catch up in the home ownership stakes by their 40s?” asks analyst Lindsay Judge. “There’s a strong sense that if you aren’t owning by 40-45, you’re probably never going to get on the ladder – barring an inheritance or a stroke of luck.”

It’s a depressing prospect, especially because many of us really don’t want to have children in unstable, damp, extortionate rented accommodation. But how long are we prepared to wait? “There are genuinely good reasons we see home ownership as so important in the UK,” Judge says. “It provides security in the here and now, as well as in later life. But we should remember that significant numbers of people never own their home – they partner, have children and life goes on.”

In other words, will there come a time when we just say, forget it, and go ahead and start a family? “It makes me feel sad,” Sharmila says. “You’re just accepting that life is what it is and you’ve just got to continue to battle on in the best way, praying and hoping that somewhere, somehow, you’ll find a way to help your kids out.”

Some names have been changed.



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