This family financing has also made a significant contribution to the sector during this period, enabling £23bn worth of first-time buyer purchases, or £5.6bn a year.
The report, written and researched by the Centre for Economics and Business Research (CEBR), on behalf of HSBC, revealed that between 2008 and 2011, the total value of first-time buyer transactions in the UK fell from £30.2bn to £28.5bn per year as economic turbulence suppressed mortgage lending.
It also showed that in the last year alone, £5.3bn or 18.7% of all first-time buyer transactions would never have taken place without family financing.
Peter Dockar (pictured), head of mortgages at HSBC, said: “It’s obvious that the Bank of Mum and Dad has stepped in to plug the gap left by those banks and building societies who have constricted their lending in recent years, which means that family support has become an important element of the post-crisis financing mix.
“This year we have committed to lending at least £4bn to first-time buyers, more than we ever have before, to help them onto the property ladder with or without family financing. We will continue to offer market-leading products for those with a smaller deposit.”
The HSBC/CEBR report also considers how family financing’s contribution to the first-time buyer market is likely to change between 2012 and 2017. According to its predictions, only 11.0% of first-time buyer transaction values will rely on family financing by 2017, compared with 18.7% in 2011.
Daniel Solomon, CEBR economist and chief author of the report, added: “Mortgage lending to first-time buyers fell off a cliff during the financial crisis. To some extent, families have moved in to fill the gap by providing gifts and loans to their first-time buyer relatives. Families’ contributions have been invaluable, helping thousands to get on to the housing ladder who would have missed out otherwise.
“Families have really stepped up to the plate by supporting relatives who want to buy their first home. Now that so many first-time buyers are having difficulty getting the mortgages they would like, gifts and loans from families have become crucial to their financing mix.”
