Bank of Mum and Dad has handed out £38.5bn to home buyer children... in just four years

The Bank of Mum and Dad has forked out close to £40 billion over the last four years helping children on to the property ladder, new figures have revealed.

Gifts and loans from the Bank of Mum and Dad totalled £9.6billion in 2024, according to analysis from estate agent Savills.

It is an increase from £9.37 billion in 2023 and £8.87billion in 2022 - though parents contributed more in 2021 at £10.67billion, during the pandemic house price surge.

Overall, the Bank of Mum and Dad has provided £38.5 billion of assistance over the past four years.

This is 71 per cent more than the £22.5billion given in the previous four years, between 2017 and 2020.

Savills revealed 173,500 first-time buyers got help from parents last year, receiving on average £55,572.

This equates to just over half of all first-time buyers, which, although lower than the proportion that received assistance in 2023, is still higher than every other year since 2012.

Lucian Cook, head of residential research at Savills said families provided more support in the last year due to a tougher mortgage market and higher rates.

He said: 'First-time buyers are still feeling the impact of higher mortgage rates and tougher lending criteria, meaning that a greater proportion have needed support to get onto the housing ladder.

'Those who were able to, took advantage of greater family support to try and secure a deal at a lower mortgage rate.'

Last month, approximately 30,788 gifted house deposits of £100,000 or more were recorded, according to separate data from Twenty7tec.

It said of all the buyers helped with gifted deposits last year, 29 per cent of them were given £100,000 or more.

'The first half of this year saw very high numbers of first-time buyer activity as buyers rushed to beat the changes in the stamp duty thresholds at the end of March,' added Cook.

'While we can expect this number to fall over the coming months, for this cohort of buyers, who are typically paying large amounts in rent each month, there is less incentive to wait for rates to drop.'

Mortgage rates have been falling, with the Bank of England now expected to cut interest rates three or four times this year, rather than just twice.

Many lenders have cut rates in recent weeks, with all the lowest rates now comfortably under 4 per cent.

Looking ahead, Cook suggests the amount of support given by the Bank of Mum and Dad could fall to lower levels.

This is due to falling mortgage rates as well as lenders relaxing their affordability rules and allowing buyers to borrow more.

This is expected to boost first-time buyer activity

Last month, HSBC tweaked its affordability calculations in a move which could allow the typical customer to borrow £39,000 more.

Lloyds Banking Group also relaxed its mortgage rules. It says typical customers may see increases of around 13 per cent in the maximum loan available.

For a family of two adults and two children with a total household income of £75,000 and no major credit commitments, it estimates that could mean an extra £38,000 on the mortgage.

'Relaxation of mortgage stress tests is expected to boost borrowing by lowering the barrier for entry and allowing first-time buyers to qualify for larger mortgages,' Cook said.

'So, although more first-time buyer activity may mean more Bank of Mum and Dad assistance, this is likely to be at a lower average cost per first-time buyer.'

While many buyers need assistance, and how much they require, varies region by region, according to Savills.

In London, average first-time buyer incomes are typically the highest nationwide, but this does not translate to higher levels of homeownership, as salaries still struggle to keep pace with rising deposit requirements.

'Here, the average deposit as a percentage of income is 138 per cent,' said Cook.

'This is far beyond what most average buyers can save for independently, meaning that it is incredibly difficult for buyers to get a foot onto the ladder without receiving help.'

Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs.

That makes it even more important to search out the best possible rate for you and get good mortgage advice.

Quick mortgage finder links with This is Money's partner L&C

> Mortgage rates calculator

> Find the right mortgage for you

To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C.

This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit.

You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes.

If you’re ready to find your next mortgage, why not use This is Money and L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.

> Find your best mortgage deal with This is Money and L&C

Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.