First-Time Buyers Relying on Family Help Gain Advantage, But Risk Deepening Housing Market Inequality

Strategic Insights -

First-time buyers who receive assistance from family members are able to make the jump onto the property ladder two years earlier and purchase homes worth nearly £40,000 more compared to those without this support, according to analysis from UK Finance. This growing reliance on financial help from relatives risks exacerbating inequality in the housing market, with UK Finance warning that a balanced approach is needed to ensure everyone has access to home ownership. Assisted buyers tend to be around 30 years old and have lower average household incomes, but they manage to buy higher-priced properties thanks to their bigger deposits facilitated by family support.

Key Takeaways:

  • First-time buyers who receive family assistance can buy a home at an average age of just over 30, compared to 32.5 years for those without support.
  • Assisted buyers have an average household income of £56,000, which is lower than the £65,000 income of unassisted buyers.
  • The average deposit put down by buyers with family help is £118,073, compared to £60,741 for unassisted buyers.
  • The average purchase price for assisted buyers is £317,846, compared to £279,381 for unassisted buyers.
  • In the West Midlands, the average income for assisted first-time buyers is £45,953, and the average house price is £248,705.
  • The Bank of England's rate cut to 4.25% may help inject more buyer interest into the housing market.
  • Housing market experts have suggested that the rate cut could help to reduce inequality in the housing market.
  • UK Finance has warned that the growing reliance on family support risks deepening inequality in the housing market.
  • Nationwide's Helping Hand deal has helped over 55,000 customers since its launch in 2021.
  • First-time buyers are also struggling to borrow enough money to buy a home due to stricter lending conditions.

Statistics:

  • Average age of assisted first-time buyers: 30.1 years
  • Average household income of assisted first-time buyers: £56,000
  • Average deposit of assisted first-time buyers: £118,073
  • Average purchase price of assisted first-time buyers: £317,846
  • Average age of unassisted first-time buyers: 32.5 years
  • Average household income of unassisted first-time buyers: £65,000
  • Average deposit of unassisted first-time buyers: £60,741
  • Average purchase price of unassisted first-time buyers: £279,381

Sources:

  • UK Finance - "Assisted First-Time Buyers Analysis"
  • The Telegraph - "First-time buyers 'relying on family help to get on property ladder'"
  • Nationwide Building Society - "Helping Hand Deal"