First-time buyers getting help from the “bank of mum and dad” typically make the jump onto the property ladder two years earlier and buy homes worth nearly £40,000 more, compared with those without additional help, analysis indicates.
UK Finance said that the growing reliance on financial help from relatives “risks deepening inequality in the housing market”.
It looked at the impact of family financial support in the first-time buyer market by analysing “assisted” and “unassisted” buyers in 2024.
UK Finance used modelling from its loans data to estimate which first-time buyers are buying with deposits they could have reasonably saved in their lifetime, given their income, and which buyers have deposits which may indicate they had help raising the cash.
First-time buyers who receive assistance are able to buy a home at an average age of just over 30, with an average household income of £56,000.
Those purchasing without support tend to be around 32-and-a-half years old and have a higher average household income, at £65,000, UK Finance said.
Despite their lower typical incomes, assisted buyers tend to buy higher-priced properties, thanks to their bigger deposits facilitated by family support.
The average deposit put down by buyers with family help is £118,073 and the average amount put down by unassisted first-time buyers is £60,741.
Across the UK, the average purchase price for buyers who have family assistance is £317,846 and the average price paid for those without this extra support is £279,381.
The difference in deposit amounts is particularly pronounced in London, the analysis found.
In 2024, a first-time buyer purchasing a home in London without family support typically put down a deposit of £145,133. But among those receiving family assistance, the average deposit was £224,054.
UK Finance also looked at the impact of a temporary stamp duty holiday, introduced during the coronavirus pandemic.
It appears to have had uneven effects, particularly helping those who could also get help from the bank of mum and dad, UK Finance said.
It found a disproportionate increase in the number of assisted first-time buyers.
The policy also coincided with a notable increase in borrowers withdrawing sizeable amounts of equity when remortgaging, suggesting that some households were drawing on their own property wealth to help family get on the housing ladder, UK Finance said.
On Thursday this week, the Bank of England reduced the base rate to 4.25%, from 4.5%.
Housing market experts have suggested the rate cut could help to inject more buyer interest into the housing market, with several lenders having already introduced more mortgages with sub-4% rates.
James Tatch, UK Finance’s head of analytics, said: “First-time buyers are essential to the UK housing market, helping to unlock transactions further up the chain and maintain overall liquidity.
“While the majority of first-time buyers are still managing to purchase without help, the growing reliance on family support risks deepening inequality in the housing market. A balanced approach which addresses both supply and affordability issues is essential to ensure the door to home ownership remains open to all.”
Toby Leek, NAEA (National Association of Estate Agents) Propertymark president, said: “These figures demonstrate that there is still much work to be done to help first-time buyers get onto the property ladder, and that for many people under the age of 30, homeownership is not a realistic aspiration without financial support from parents.”
Here are average incomes, home purchase prices, deposit sizes and ages for first-time buyers with assistance, followed by the same figures for buyers without assistance, according to UK Finance:
East Anglia, £51,698, £286,957, £102,340, 30.0, £63,086, £273,723, £56,060, 32.4
East Midlands, £44,959, £237,872, £80,486, 29.5, £56,206, £229,565, £41,788, 32.3
London, £87,895, £546,972, £224,054, 31.7, £107,262, £519,880, £145,133, 33.9
North East, £40,624, £189,455, £66,176, 28.7, £49,281, £167,161, £29,918, 31.3
North West, £44,971, £231,697, £82,579, 29.8, £55,661, £212,871, £40,262, 32.2
Northern Ireland, £42,680, £205,514, £87,177, 29.9, £51,495, £183,571, £40,165, 32.3
Scotland, £42,814, £203,450, £72,267, 28.5, £52,003, £182,442, £36,882, 31.6
South East, £60,659, £359,719, £127,833, 30.7, £75,032, £347,481, £71,951, 33.2
South West, £50,290, £288,601, £104,071, 30.3, £60,887, £275,911, £58,882, 32.5
Wales, £41,824, £212,558, £75,985, 29.7, £51,157, £193,640, £35,551, 31.8
West Midlands, £45,953, £248,705, £87,239, 30.2, £57,048, £235,819, £45,037, 32.6
Yorkshire and the Humber, £42,155, £214,354, £75,357, 29.2, £51,728, £196,711, £37,809, 31.5
UK, £56,015, £317,846, £118,073, 30.2, £65,351, £279,381, £60,741, 32.5
