First-Time Buyers Relying on Family Help in UK

Strategic Insights -

First-time buyers in the UK often rely on financial help from their families, typically purchasing homes two years earlier and for nearly £40,000 more than those who do not receive assistance. This trend, however, risks deepening the inequality in the housing market. A recent analysis by UK Finance looked at the impact of family financial support on first-time buyers in 2024, comparing "assisted" and "unassisted" buyers.

Key Takeaways:

  • Assisted first-time buyers make the jump onto the property ladder two years earlier, on average, compared to unassisted buyers.
  • The average age of assisted first-time buyers is 30 years old, with an average household income of £56,000.
  • Those purchasing without support tend to be around 32.5 years old and have a higher average household income, at £65,000.
  • Assisted buyers tend to buy higher-priced properties, thanks to their bigger deposits facilitated by family support.
  • The average deposit put down by buyers with family help is £118,073, while the average deposit put down by unassisted first-time buyers is £60,741.
  • The average purchase price for buyers who have family assistance is £317,846, compared to £279,381 for those without this extra support.
  • In London, the average deposit for unassisted buyers is £145,133, while assisted buyers average £224,054.
  • The temporary stamp duty holiday introduced during the coronavirus pandemic had uneven effects, particularly helping those who could also get help from the "bank of mum and dad".
  • The policy coincided with a notable increase in borrowers withdrawing sizeable amounts of equity when remortgaging.

Statistics:

  • £40,000: the average difference in property price between assisted and unassisted buyers.
  • 2 years: the age gap of assisted and unassisted first-time buyers.
  • £118,073: the average deposit put down by buyers with family help.
  • £60,741: the average deposit put down by unassisted first-time buyers.
  • £317,846: the average purchase price for buyers who have family assistance.
  • £279,381: the average purchase price for buyers without family assistance.
  • £145,133: the average deposit for unassisted buyers in London.
  • £224,054: the average deposit for assisted buyers in London.

Sources:

  • UK Finance
  • [UK Finance's analysis on first-time buyers and family financial support](https://ukfinance.org.uk/news-and-policy/first-time-buyers-risk-inequality-in-the-housing-market)
  • Bank of England
  • [NAEA (National Association of Estate Agents) Propertymark](https://www.propertymark.co.uk/news-and-blogs/news-and-blogs/news/first-time-buyers-face-inequality-in-housing-market)