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According to the estimates by estate agency Savills, over half of first-time buyers received financial assistance from their family in order to purchase homes in the previous year. The so-called “bank of mum and dad” provided an average of £55,572 in loans and gifts to these buyers. Young buyers experienced high mortgage rates in 2024 and also observed a rise in rental costs. Changes in stamp duty regulations prompted a wave of new buyers before the end of March, with increased expenses for those who missed the deadline.
The annual report from Savills reveals that 52% of first-time buyers received help from their families last year, a slight decrease from the previous year’s 57% but still higher than figures from 2013 onwards. In 2009, during the aftermath of the financial crisis, family assistance peaked with 70% of first-time buyers receiving aid. Last year, an estimated 173,500 first-time buyers received assistance totalling £9.6 billion. These findings are based on data regarding first-time buyers, average loan-to-value ratios, along with survey responses on family support.
In 2024, the average rate for new two and five-year fixed mortgages ranged between 5% and 6%, according to Moneyfacts. This rate would be even higher for many first-time buyers who couldn’t provide a substantial deposit, significantly surpassing levels from a few years prior. Lucian Cook, Savills’ head of residential research, noted that buyers facing these challenges sought additional family support to secure deals at lower mortgage rates. Rising living costs and escalating rental expenses have also added financial strain to potential first-time buyers, prompting many to consider entering the property market sooner.
The changing landscape of stamp duty, with adjustments made in April to include first-time buyers of homes above £300,000 in England and Northern Ireland, has influenced market dynamics. This alteration in policy led to a surge in first-time buyer transactions ahead of the deadline. Analysis by the Yorkshire Building Society indicated a rise in first-time buyer applications in the first quarter of this year. Cook suggested that regulatory authorities may consider relaxing lending criteria, potentially benefiting first-time buyers and their families by lowering barriers to entry and enabling them to qualify for larger mortgages
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