Sibling support for first-time buyers doubles - research

Forget the Bank of Mum & Dad, now even siblings are chipping in to help brothers and sisters onto the property ladder.

Research by Hamptons using Skipton Building Society data showed 32% of mortgaged first-time buyers across Great Britain have received family support towards their deposit so far this year, up from 30% in 2022.

Siblings made up a record 11% of family members contributing to first-time buyer deposits, more than double the share recorded five years ago (5%) and surpassing grandparents’ contribution (8%) for the first time.  

They gave an average of £10,250 to their sibling so far this year.

Parents remain most likely to gift money towards a child’s deposit, making up 72% of those lending support so far this year. 

However, this share has gradually declined from a peak of 80% in 2018.

Parents are the most generous though, gifting an average of £15,250 so far in 2023.

Family help tends to mean first-time buyers purchase a more expensive home, the research shows.  The average first-time buyer in Great Britain who had family help paid £257,290 for their home this year, £6,500 more than someone without additional contributions. 

It also allowed them to buy sooner.  The average first-time buyer who had a deposit boost from a family member was 31.3 years of age compared to 32.5 years for someone who saved up themselves.

Aneisha Beveridge, head of research at Hamptons, said: “As homeownership rates decline through the generations, younger parents today are less likely to be homeowners than their predecessors, which reduces their ability to withdraw equity from their home to pass on to children.

“Rather, first-time buyers are increasingly leaning towards other family members to boost their deposits.  Siblings are at the forefront with older brothers and sisters at the more affluent end of the spectrum putting their hands in their pockets.  They are highly likely to already be homeowners who want to help their younger siblings take their first step onto the property ladder.

“Should interest rates stay higher for longer, it will exacerbate the gap between what those with and without family help can afford.  Those without help will likely face saving up for longer and buying later in life or purchasing a smaller home in a more affordable area to keep their mortgage payments within their means.”