Bank of Mum and Dad to lend £30bn to first-time buyers over next three years – Savills

Some £30bn is expected to be gifted to first-time buyers in the next three years, according to estate agency group Savills.

Last year £9.4 billion was gifted to 164,000 first-time buyers, accounting for a huge 57% of all mortgaged first-time buyers.

Frances McDonald, director of residential research at Savills, said: “While many homebuyers enjoyed record-low interest rates during the early part of the decade, more stringent mortgage requirements, which have been in place since the start of the pandemic, have impacted higher-loan-to-value (LTV) lending, most commonly used by first-time buyers.

“In addition to this, record rental growth and increased mortgage rates, particularly for high-LTV products, have acted as a further blow to first-time buyers’ homeowning 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.”

Lower mortgage rates should mean buyers are less reliant on their families, but over half (54%) of mortgaged buyers are expected to use financial gifts this year, falling to 51% in 2025, and 50% in 2026.

McDonald added: “Despite the Bank of England’s recent decision to cut the base rate, we expect that lenders will continue to favour less risky, lower-LTV mortgage lending. This means that buyers will still have a hard time getting their first foot on the housing ladder.

“Those who have the option of family support and are secure in their employment will find it much easier to get onto the housing ladder and only the highest earners and those who have received significant support are likely to be able to buy at the top end of the market.”