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Growing family cash help to lift buyers out of rental sector

Financial support from family members - not just parents - is expected to help fund 318,400 housing transactions in 2023, according to Legal & General.

In joint research with the Centre for Economics and Business Research (Cebr), the figure is the highest number of property purchases family gifting has ever supported since Legal & General began tracking family lending in 2016.

In previous years Legal & General has logged this lending as the ‘Bank of Mum and Dad’, but this year the business will be referring to the ‘Bank of Family’, as it says the term more accurately reflects the contribution of other members and the breadth and diversity of modern family structures.


This is the second piece of research to show such findings in recent days - last week there was a similar study by lettings agency Hamptons.

The value of financial support families will give, and the number of home purchases that this will help fund, have both ballooned over the last seven years according to Legal & General.

Following an inevitable dip in lending during the Covid-19 lockdowns, the value of financial support offered by families resumed its dramatic growth. 

The average amount of Bank of Family money given by family is expected to hit £25,600 this year, while total lending is expected to climb to £8.1 billion in 2023, up 50 per cent on 2020. The total value of properties bought with Bank of Family assistance is predicted to reach £124.6 billion this year.

Family contributions are set to climb to a staggering £10 billion by 2025, according to the research. This increasing reliance on financial support from parents, grandparents, other family, and friends underlines the challenges faced by aspiring buyers who don’t have access to this support. 

The majority of recent or prospective Bank of Family recipients said they would have to delay their home purchase without financial help from loved ones. 

More than one in five say they would have to delay their purchase by more than five years and one in 10 first-time buyers would not be able to buy a home without assistance from the Bank of Family.

Unsurprisingly younger buyers and first-time buyers are the most reliant on direct financial support and often can’t buy without it

In 2023, the Bank of Family will provide support for almost half of house purchasers under the age of 55, and 58 per cent of financial support from the Bank of Family currently goes to first-time buyers. These groups are major recipients of Bank of Family funding, likely because they are comprised of buyers who might otherwise struggle to save the necessary deposit for home purchase.

Legal & General’s research found that 77 per cent of buyers receiving family assistance directed at least a portion of their funding towards a deposit. This is perhaps not surprising given the fact that average household savings have not kept pace with large rises in deposit requirements, given significant house price inflation.

Families are not just offering monetary aid though. Many are also providing indirect financial support to help loved ones boost their savings pot. 

For example, almost a third of parents and grandparents have welcomed adult family members to live with them to make it easier to save for a deposit, while a further 37 per cent would be willing to house their adult children in the future. 

Legal & General estimates that buyers save an average of £24,900 when living with family members, which they can put towards their deposit. However, this support is likely another key factor exacerbating the gap between those with and those without family wealth when it comes to homeownership – not only does this support rely on households being able to afford additional residents, but also having the space to adequately house them.

Bernie Hickman - chief executive of Legal & General Retail - says: “Family wealth is increasingly becoming a prerequisite for homeownership, effectively locking some groups out of the housing market for years while they save for deposits, or even altogether. 

“While family gifting has always played a prominent role in the UK housing market, our study shows that the value of those contributions has risen by more than a quarter on pre pandemic levels.

“An increasing reliance on family members isn’t only an issue for those seeking to buy – it is important to acknowledge the financial strain it can place on the giver, particularly if they are undertaking this commitment without financial advice. 

“By dipping into savings and pensions, family members may be compromising on their own retirement incomes. A housing system which relies too heavily on gifted deposits not only perpetuates inequality today, but could create risks for the older generations of the future.”


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