According to analysis from Savills, some 173,500 first-time buyers received financial assistance to buy a home last year, averaging £55,572.
This equated to more than half – 52% – of the people who became homeowners last year. This was a lower proportion than the 57% who had the support of BOMAD in 2023, but remained higher than every other year since 2012.
It was also higher than the £9.4bn lent to new homeowners by BOMAD in 2023.
Over the last four years, BOMAD has given £38.5bn to first-time buyers, 71% more than the previous four years, which totalled £22.5bn. Savills said this was due to a more restrictive mortgage market and higher interest rates.
Lucian Cook, head of residential research at Savills, said: “First-time buyers are still feeling the impact of higher mortgage rates and tougher lending criteria, meaning that a greater proportion have needed support to get onto the housing ladder, and those who were able to took advantage of greater family support to try and secure a deal at a lower mortgage rate.
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“Looking ahead, the first half of this year saw very high numbers of first-time buyer activity as buyers rushed to beat the changes in the stamp duty thresholds at the end of March. While we can expect this number to fall over the coming months, for this cohort of buyers, who are typically paying large amounts in rent each month, there is less incentive to wait for rates to drop.
“Relaxation of mortgage stress tests is expected to boost borrowing by lowering the barrier for entry and allowing first-time buyers to qualify for larger mortgages. So, although more first-time buyer activity may mean more Bank of Mum and Dad assistance, this is likely to be at a lower average cost per first-time buyer.”
More help needed for first-time buyers in London and the South East
Savills found there were variations in how much financial assistance new homeowners needed, which depended on the region they were purchasing a home in.
Although first-time buyers in London have the highest incomes on average, the firm found they still struggled to keep up with rising deposit requirements.
Cook added: “Here, the average deposit as a percentage of income is 138%.
“This is far beyond what most average buyers can save for independently, meaning that it is incredibly difficult for buyers to get a foot onto the ladder without receiving help.”
