Over a third of wannabe homeowners in England (34%) now turn to family for a financial gift or loan to help them get a foot on the housing ladder compared to one in five (20%) seven years ago.
Analysis by the Social Mobility Commission also found 12% of existing owners benefit from a gift or a loan when buying a new home.
The report found first-time buyers who receive money or a loan from their parents can buy 2.6 years earlier than those who do not. In London, this figure rises to 4.6 years.
It also said homeownership has plummeted.
For 25 to 29-year-olds, homeownership has fallen by more than half in the last 25 years from 63% in 1990 to 31% most recently.
The report’s lead author, Dr Paul Sanderson, from Anglia Ruskin University, said: “Over the past few decades, pressure on housing affordability has been increasing, leading to a significant decrease in the proportion of young people entering home ownership. Those who do manage to become first-time buyers, tend to do so at a later age than the previous generation.
“Affordability problems mean that parents and other family members have a critical role in assisting their children to buy their first home, either by means of a gift of money or a soft loan.”
The report warned that the difficulty in buying a home is becoming a barrier to improving social mobility in the UK.
Alan Milburn, chair of the Social Mobility Commission, said: “Homeownership helps unlock high levels of social mobility but it is in free-fall among young families. Owning a home is becoming a distant dream for millions of young people on low incomes who do not have the luxury of relying on the bank of mum and dad to give them a foot up on the housing ladder.
“The way the housing market is operating is exacerbating inequality and impeding social mobility.”
Milburn welcomed the government’s recognition of the growing problem people face in getting on the housing ladder.
In February, the government published a white paper promising more homebuilding and help for renters. Its plans include releasing more public land, providing funding for small and medium-sized builders and building more affordable homes.