Support from Bank of Mum and Dad hits 11-year high

More than half of mortgaged first-time buyers received support from the Bank of Mum and Dad in 2023, the highest proportion since 2012, Savills suggests.

This amount has almost doubled since 2019, as a result of a more stringent mortgage market, and higher mortgage rates.

In total, 164,000 first-time buyers had family assistance to purchase their first home in 2023, accounting for 57% of all mortgaged first-time buyers, according to the research.

While the number of assisted buyers is down from a peak of 198,000 in 2021, this is the highest proportion of first-time buyers receiving help since 2012, and is 10% up on 2022.

But respite could be on the way, the agent suggests.

As mortgage rates continue to decrease, Savills has forecast that a smaller proportion of first-time buyers are likely to need support from the Bank of Mum and Dad.

While the actual number of those supported is expected to remain on par with 2023, the proportion of first-time buyer purchases receiving support will decrease from 57% in 2023 to 54% in 2024.

The total contribution towards first-time buyer purchases will remain in line with 2023 levels (£9.3bn). A total of almost £30 billion is expected to be paid out over the next three years, Savills said.

Frances McDonald, director of residential research at Savills, said:“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.”