Research from Savills showed that, last year, the Bank of Mum and Dad (BOMAD) gifted £9.4bn to 164,000 first-time buyers, accounting for 57% of all mortgaged first-time buyers. 

This was the highest proportion since 2012 and a larger share than the 46% of first-time buyers who received financial assistance from their parents in 2022. 

While Savills has predicted a smaller share of new homeowners will need to rely on BOMAD due to lower mortgage rates, the actual number of people receiving familial help is expected to remain stable. 

The company has predicted 54% of first-time buyers will use financial gifts from their parents this year, accounting for 163,000 people. Savills has forecast that £9.3bn will be gifted to these buyers. 

In 2025, this is expected to fall to a share of 51% of all mortgaged first-time buyers, but account for more people, at a total of 174,000. The amount of money gifted will be higher too, and is predicted to total £10.1bn. 

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By 2026, half of first-time buyers with a mortgage will receive a gift from parents, making up 170,000 people. The amount of money gifted will stay flat on the previous year, at £10.1bn. 

 

Getting onto property ladder will remain tricky 

Frances McDonald, director of residential research at Savills, said: “While many homebuyers enjoyed record-low interest rates during the early part of the decade, more stringent mortgage requirements, which have been in place since the start of the pandemic, have impacted higher-loan-to-value (LTV) lending, most commonly used by first-time buyers.

“In addition to this, record rental growth and increased mortgage rates, particularly for high-LTV products, have acted as a further blow to first-time buyers’ homeowning aspirations. As a result, a greater proportion have needed support to get onto the housing ladder, and those who were able to took advantage of family support to try and secure a deal at a lower mortgage rate.”

McDonald added: “Despite the Bank of England’s recent decision to cut the base rate, we expect that lenders will continue to favour less risky, lower-LTV mortgage lending. This means that buyers will still have a hard time getting their first foot on the housing ladder. 

“Those who have the option of family support and are secure in their employment will find it much easier to get onto the housing ladder and only the highest earners and those who have received significant support are likely to be able to buy at the top end of the market.”