‘Bank of Mum & Dad’ helped support a third of sales last year

First-time buyers still need to raise an eyewatering £36,000 to get their first foot on the property ladder – even with the help of ‘Bank of Mum & Dad’, latest data from Legal & General reveals.

Bank of Mum & Dad helped to fund an estimated 318,400 purchases in 2023, with families loaning first-time buyers £8.14 billion in order to climb the ladder.

HANDOUT

But despite the handout buyers are still having to find significant amounts of money to bridge the gap between what their family can lend and what the property costs.

Analysis of the L&G data by Yopa shows the average first-time buyer home in Britain currently costs £237,655 – meaning the amount of money required for a 15% deposit is £35,648.

Even with the support of loved ones buyers are still need to find an extra £10,048 to cover the deposit.”

With the average family contribution towards a purchase standing at £25,600 even with the support of loved ones buyers are still need to find an extra £10,048 to cover the deposit.

In London the average first-time buyer house price is £440,322 which means the average deposit required sits at £66,048. Bank of Mum & Dad contributes an average of £30,200 in the capital but this still means that the buyers have to provide a whopping £35,848.

In the wider South East, family contributions cover 59.4% leaving the buyers to find an additional top-up of £18,212. In the South West, the Bank of Mum & Dad covers 64.5% of the deposit leaving £13,897 to be found by the buyer. While in the North West, families are contributing an average of 87.8% of the deposit; in Scotland, they’re putting up 90.9% of the deposit and in Yorkshire & Humber they’re contributing 91.6%.

ENTIRE COST

But, in the North East, the Bank of Mum & Dad is able to cover the entire cost of the deposit with average first-time buyer homes priced at £134,621 and requiring a 15% deposit of £20,193.

Verona Frankish of Yopa said: “It’s no secret that a huge number of first-time buyers are only able to get onto the housing ladder because of significant help from generous family members.

“This has always been the case and the Bank of Mum and Dad helps hundreds of thousands of first-time buyers onto the ladder every year.”

But she adds: “However, with house prices continuing to climb in recent years, the Bank of Mum & Dad is lending considerably more today than it has previously and even with this contribution, the average first-time buyer is still required to save a hefty sum themselves.”