Home > News > Bank of family will help thousands of UK house buys this year

Bank of family will help thousands of UK house buys this year

The “bank of mum and dad”, where homebuyers rely on their parents to get a foot on the property ladder, has long been a key part of the UK housing market.

But continued pressure on budgets means other relatives including siblings are now being recruited to the cause, and this newly named “bank of family” is forecast to help finance a record number of house buys this year.

Two reports published on Monday show that ongoing housing affordability problems mean those who want to buy a home are turning to parents, grandparents and, increasingly, siblings to help raise the deposit. Although house prices have started to dip, rising mortgage rates have made monthly payments more expensive and may be behind the rise in the number of buyers seeking family help.

Legal & General said relatives were expected to support 318,400 UK property purchases in 2023, including 47% of all those involving buyers under the age of 55. Its research, based on separate surveys of buyers and parents and grandparents, found that £8.1bn would be handed to homebuyers by family members this year, with an average of £25,600 going towards each bank transaction. A majority – 186,700 homes – have been bought or are expected to be bought with assistance from parents, 39,800 will be bought with funds from grandparents and 91,900 with funds from other family or friends.

Not all the help involves giving money directly: while 77% of buyers received money towards a deposit, others lived with parents or other family members while saving up.

The value of financial support has ballooned in recent years, except for a dip during Covid lockdowns, and Legal & General said it expected family contributions to climb to £10bn by 2025.

Separate research by the property firm Hamptons found that while parents were still the most likely to help out first-time buyers, other family members were increasingly offering support.

This year it said 32% of first-time buyers had received family support with a deposit, with 72% getting the money from their parents, according to its analysis of mortgages granted by Skipton Building Society. This was down from 80% in 2018. After this, siblings were most likely to have helped out, accounting for 11% of cases of assistance, compared with 6% six years ago.

Aneisha Beveridge, the head of research at Hamptons, questioned whether the bank of Mum and Dad was starting to run dry. “As homeownership rates decline through the generations, younger parents today are less likely to be homeowners than their predecessors, which reduces their ability to withdraw equity from their home to pass on to children,” she said. “Rather, first-time buyers increasingly lean towards other family members to boost their deposits.”

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide excellent property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social, and charitable causes. If you want to know more about our efforts or how you can help, contact us at admin@hich-ltd.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your postcode area. Find more information here or by following the QR code in the video.