Yopa’s Verona Frankish says even though Bank of Mum and Dad have always helped first-time buyers onto the ladder rising house prices means they’re having to shell out more than ever before.
First-time buyers still need to raise an eyewatering £36,000 to get their first foot on the property ladder – even with the help of Bank of Mum and Dad, latest data from Legal & General reveals.
Bank of Mum and Dad helped to fund an estimated 318,400 purchases in 2023, with families loaning first-time buyers £8.14 billion in order to climb the ladder.
HANDOUT
But despite the handout buyers are still having to find significant amounts of money to bridge the gap between what their family can lend and what the property costs.
Analysis by Yopa shows the average first-time buyer home in Britain currently costs £237,655 – meaning the amount of money required for a 15% deposit is £35,648.
With the average family contribution towards a purchase standing at £25,600 even with the support of loved ones buyers are still having to contribute an additional £10,048 to cover the cost of the deposit. In London the average first-time buyer house price is £440,322 which means the average deposit required sits at £66,048. Bank of Mum and Dad contributes an average of £30,200 in London but this still means that the buyers have to provide a whopping £35,848.
REGIONAL DIFFERENCES
In the South East, family contributions cover 59.4% leaving the buyers to find an additional top-up of £18,212. In the South West, the Bank of Mum and Dad covers 64.5% of the deposit leaving £13,897 to be found by the buyer. In the North West, families are contributing an average of 87.8% of the deposit; in Scotland, they’re putting up 90.9% of the deposit and in Yorkshire & Humber they’re contributing 91.6%.
But, in the North East, the Bank of Mum and Dad is able to cover the entire cost of the deposit with average first-time buyer homes priced at £134,621 and requiring a 15% deposit of £20,193.
Verona Frankish (main picture), Yopa Chief Executive, says: “It’s no secret that a huge number of first-time buyers are only able to get onto the housing ladder because of significant help from generous family members.
“This has always been the case and the Bank of Mum and Dad helps hundreds of thousands of first-time buyers onto the ladder every year.”
But she adds: “However, with house prices continuing to climb in recent years, the Bank of Mum and dad is lending considerably more today than it has previously and even with this contribution, the average first-time buyer is still required to save a hefty sum themselves.”
