More than half of first-time home buyers get help from Mum and Dad

More than half of all first-time home buyers in the UK now get help from the Bank of Mum and Dad, according to research by the estate agents, Savills.

Mandy Shum Conveyancer in our property team provides an update.

Approximately 173,500 first-time buyers received assistance last year, receiving on average £55,572. This equates to just over half (52%) of all first-time buyers, which, although lower than the proportion that received assistance in 2023 (57%), is still higher than every other year since 2012 (53%).

Overall, parents provided £38.5 billion of assistance over the past four years. This is 71% more than the previous four years (£22.5 billion), as a result of a more stringent mortgage market and higher mortgage rates.

Lucian Cook, head of residential research at Savills, said: “First-time buyers are still feeling the impact of higher mortgage rates and tougher lending criteria, meaning that a greater proportion have needed support to get onto the housing ladder, and those who were able to, took advantage of greater family support to try and secure a deal at a lower mortgage rate.

“Looking ahead, the first half of this year saw very high numbers of first-time buyer activity as buyers rushed to beat the changes in the stamp duty thresholds at the end of March. While we can expect this number to fall over the coming months, for this cohort of buyers, who are typically paying large amounts in rent each month, there is less incentive to wait for rates to drop.

“Relaxation of mortgage stress tests is expected to boost borrowing by lowering the barrier for entry and allowing first-time buyers to qualify for larger mortgages. So, although more first-time buyer activity may mean more Bank of Mum and Dad assistance, this is likely to be at a lower average cost per first-time buyer.”

However, how many buyers need assistance, and how much they require, varies region by region.

In London, average first-time buyer incomes are typically the highest nationwide, but this does not translate to higher levels of homeownership, as incomes still struggle to keep pace with rising deposit requirements.

Here, the average deposit as a percentage of income is 138%. This is far beyond what most average buyers can save for independently, meaning that it is incredibly difficult for buyers to get a foot on to the ladder without receiving help.

If you would like advice about the legal aspects of buying or selling a home please contact Mandy on 01768 862326 or click here to send her an email.