The Bank of Mum and Dad (BoMaD) are expected to give nearly £30bn to help their children buy homes over the next three years. [1] In 2023 alone, £9.4bn was given to FTBs.
Property transactions dropped by 20% in 2023, but those who did buy needed more help due to higher mortgage rates. About 57% of FTBs with mortgages received family support, the highest since 2012.
While fewer people are likely to need help as mortgage rates fall, the amount given or lent to children has nearly doubled since 2019. The percentage of FTBs getting help is expected to drop slightly, from 57% in 2023 to 54% in 2024. However, the total amount given by families will remain around £9.3bn per year.
A Foot on the Ladder Frances McDonald, Director of Residential Research at Savills, said, “Record rental growth and increased mortgage rates (particularly for high LTV products) have acted as a further blow to first-time buyers’ home-owning aspirations. As a result, a greater proportion have needed support to get onto the housing ladder, and those who were able to took advantage of family support to try and secure a deal at a lower mortgage rate.”
[1] Savills, 2024
🚨 Data accurate as of the date of publication – 09.12.2024
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Source: Quilter Financial Planning – Essentially Mortgages Q4 2024
