TL;DR: A new survey found that 88% of UK adults aged 45 and over would consider helping children or grandchildren buy a home. An even more striking 97% believe young buyers now struggle without family support. The “Bank of Mum and Dad” is no longer a side story in the housing market. For many first-time buyers, family wealth is becoming the difference between buying and continuing to rent.
Buying your first home was never exactly cheap. But we are reaching the point where earning a decent salary and saving carefully may still not be enough.
New research suggests family money has moved from being a helpful bonus to something much closer to part of the deposit plan.
According to a survey reported by Introducer Today, 88% of UK adults aged 45 and over would consider helping their children or grandchildren purchase a property. Meanwhile, 97% said it is difficult or very difficult for young people to buy without family support.
That is not really a “Bank of Mum and Dad” story anymore. It is becoming a story about who has access to family wealth and who does not.
The numbers behind the Bank of Mum and Dad
The survey of 2,126 UK adults aged 45 and over, conducted for The Private Office, found:
Source: research reported by Introducer Today and Mortgage Professional, August 2026.
Among people who had already transferred money to relatives, property was the single biggest reason for doing so. Half cited a home purchase, compared with 20% helping with general living costs and 8% contributing to education.
The same report cited previous Savills research putting the average family contribution to a first-time buyer at £55,572. Barclays figures reportedly estimate that families supplied £38.5 billion of housing support over four years.
Why first-time buyers need so much help
The deposit gets most of the attention, but it is only one part of the affordability calculation.
- House prices remain high relative to earnings. Even where prices have stopped rising, affordability does not automatically recover.
- Mortgage borrowing is constrained by income. A larger deposit cannot always compensate for failing a lender’s monthly affordability assessment.
- Higher mortgage rates increase monthly payments. Buyers may qualify for less debt even if their salary has risen.
- Buying costs sit outside the deposit. Legal work, surveys, mortgage fees, moving costs and Stamp Duty can require thousands more in cash.
- Rent makes saving harder. Buyers are trying to build a deposit while paying somebody else’s mortgage, which is quite the financial warm-up act.
What a family contribution can actually change
A family gift can reduce the loan-to-value ratio, or LTV. That is the mortgage expressed as a percentage of the property’s value.
For example, on a £300,000 home:
| Deposit | Mortgage | LTV |
|---|---|---|
| £15,000 | £285,000 | 95% |
| £30,000 | £270,000 | 90% |
| £45,000 | £255,000 | 85% |
| £60,000 | £240,000 | 80% |
Moving into a lower LTV band may unlock a wider choice of mortgages and potentially cheaper rates. It also reduces the amount borrowed and therefore the monthly repayment.
But there is an important catch: lenders still assess income, spending, debts and financial commitments. A £60,000 deposit does not guarantee approval for the remaining mortgage.
Gift, loan or shared ownership?
Families need to decide what the money actually is before anyone starts viewing kitchens and arguing about where the sofa will go.
| Method | What it means | Main issue |
|---|---|---|
| Outright gift | No repayment or ownership expected | Inheritance-tax and family-record considerations |
| Family loan | Money must be repaid | Can reduce mortgage affordability and lender choice |
| Family owns a share | Relative receives an interest in the property | Legal, tax and future-sale complications |
| Joint borrower arrangement | Family income supports the mortgage | Relative may become liable for the debt |
| Family guarantee | Savings or property support the application | Family assets can be at risk if payments fail |
Many lenders accept gifted deposits, but they usually require a signed declaration confirming that the money is a genuine gift, does not need to be repaid and gives the donor no ownership rights. Solicitors will also need evidence showing where the money came from for anti-money-laundering checks.
If the “gift” is secretly expected to be repaid, tell the lender and solicitor. Hiding that liability can undermine the mortgage application and create a spectacularly awkward family Christmas later.
The tax issue families should not ignore
Giving somebody money does not normally create an immediate income-tax bill for the recipient. However, larger gifts can matter for Inheritance Tax if the donor dies within seven years.
HMRC currently provides a £3,000 annual gifting exemption, with one unused year’s allowance potentially carried forward. Other exemptions can apply, including certain wedding gifts and qualifying regular gifts made from surplus income.
A larger outright gift is usually treated as a potentially exempt transfer. If the donor survives for seven years, it normally falls outside their estate for Inheritance Tax. The actual calculation depends on the donor’s estate, earlier gifts and available exemptions, so large contributions deserve proper tax advice rather than a guess from somebody’s uncle.
Parents and grandparents should also protect their own retirement. In the survey, the biggest reason for holding money back was fear of running out in retirement, cited by 37%, followed by concern about future care costs at 16%.
Helping a younger relative buy is generous. Making yourself financially insecure to do it is not a sound plan.
First-time buyer help that does not require wealthy parents
Family money can accelerate a purchase, but buyers without access to it are not automatically excluded. They may need a different route or a longer timeline.
- Lifetime ISA: Eligible first-time buyers can receive a 25% government bonus on contributions. The property must cost £450,000 or less, the account must have been funded for at least 12 months, and other conditions apply.
- 95% mortgages: Some lenders accept deposits as low as 5%, although rates and affordability tests may be tougher.
- First Homes: Eligible buyers may purchase qualifying new homes at a discount of at least 30%, subject to income, local and mortgage requirements.
- Shared ownership: Buyers purchase a share and pay rent on the remainder. It can reduce the initial deposit but introduces rent, service charges and staircasing costs.
- Buying in a different area: Not glamorous advice, but changing postcode often alters affordability more than shaving £20 from the monthly budget ever will.
Do first-time buyers still get Stamp Duty relief?
In England and Northern Ireland, eligible first-time buyers currently pay no Stamp Duty Land Tax on the first £300,000 and 5% on the portion from £300,001 to £500,000.
If the property costs more than £500,000, First-Time Buyers’ Relief does not apply and the standard rates are charged on the full price. Every purchaser must qualify as a first-time buyer and intend to occupy the property as their main residence.
Scotland and Wales use different property taxes and rules, so do not apply an England-only TikTok calculation to a purchase in Edinburgh or Cardiff.
When access to homeownership depends heavily on parental wealth, the market is rewarding the family you were born into as much as the work you put in.
The uncomfortable truth
The good news is that many parents and grandparents want to help. The bad news is that a housing system increasingly dependent on that help rewards family circumstances alongside personal effort.
Two buyers can earn the same salary, save the same percentage and make equally sensible choices. If one receives £55,000 from family and the other receives nothing, they are not competing in the same housing market.
That does not make family help wrong. Parents should be free to support their children when they can afford it. But we should be honest about what the numbers show: access to homeownership is becoming partly inherited.
If you are preparing to buy, the most useful step is to calculate the entire cash requirement, not just the advertised deposit. Then establish whether any family contribution is a gift, loan or ownership stake before speaking to a mortgage adviser and solicitor.
Watch: How much do first-time buyers really need?
The headline deposit is rarely the full story. This video breaks down the numbers first-time buyers need to consider before deciding whether they are genuinely ready to purchase.
Frequently asked questions
How much help do first-time buyers usually need from family?
There is no standard amount. It depends on the purchase price, the buyer’s income, lender affordability checks, deposit size and buying costs. A bigger deposit helps, but it does not override an unaffordable monthly mortgage.
Can parents gift a house deposit?
Yes, many lenders accept gifted deposits. The donor will normally need to confirm that the money is a genuine gift, that repayment is not expected and that they will not own part of the property.
Can family support be structured as a loan instead?
It can, but the loan must be disclosed. Required repayments may reduce mortgage affordability, and some lenders will not accept certain family-loan arrangements.
Does the seven-year inheritance-tax rule apply to gifted deposits?
An outright gift can be a potentially exempt transfer. It will generally fall outside the donor’s estate if they survive seven years, but earlier gifts, available allowances and the donor’s wider estate can affect the result.
What can buyers use if family help is not available?
Depending on eligibility, options include a Lifetime ISA, 95% mortgages, First Homes, shared ownership or buying in a less expensive area. Each option has its own costs and restrictions.
Does a larger deposit guarantee mortgage approval?
No. Lenders also assess income, expenditure, debts, credit history, property suitability and the affordability of future payments. Deposit size is only one part of the decision.
Sources
- Introducer Today: 88% of adults would help children or grandchildren buy
- Mortgage Professional: Rising costs have made family wealth central to first-time buying
- HMRC: First-Time Buyers’ Relief
- GOV.UK: Using a Lifetime ISA for a first home
- HMRC: Inheritance Tax rules on gifts
- GOV.UK: First Homes eligibility
This article provides general information and is not personal mortgage, legal or tax advice. Mortgage eligibility depends on individual circumstances and lender criteria.
