The UK housing market has always been a complex tapestry of dreams, aspirations, and financial intricacies. Traditionally, many first-time buyers leaned on the Bank of Mum and Dad to make their homeownership dreams a reality. However, recent trends indicate a shift towards a broader Bank of Family as housing affordability becomes an increasing challenge.
Two recent reports, one from Legal & General and another from Hamptons, shed light on this evolving landscape. Legal & General's research suggests that relatives will support a staggering 318,400 UK property purchases in 2023, with a total contribution of £8.1bn. On average, each transaction sees a family contribution of £25,600. While parents remain a significant source of this support, Hamptons' research indicates a decline in parental aid for first-time buyers from 80% in 2018 to 72% in 2023. In contrast, siblings are stepping up, with their assistance rates rising from 6% to 11% over the same period.
This shift underscores a pressing issue: the increasing difficulty of entering the housing market without family assistance. Over one in five first-time buyers admitted they'd have to delay their purchase by over five years without such help. Alarmingly, one in 10 revealed they wouldn't be able to buy at all.
Key Bullet Points of The Report:
· The traditional Bank of Mum and Dad has evolved into the Bank of Family due to ongoing housing affordability issues.
· Legal & General forecasts relatives will support 318,400 UK property purchases in 2023, with £8.1bn being given by family members. The average contribution is £25,600 per transaction.
· While 77% of buyers received money for a deposit, some lived with family while saving. The value of this financial support is expected to rise to £10bn by 2025.
· Research by Hamptons indicates a decline in parental support for first-time buyers from 80% in 2018 to 72% in 2023. Siblings' assistance has increased from 6% to 11% in the same period.
· Over 20% of first-time buyers would have to postpone their purchase by over five years without family assistance, and 10% wouldn't be able to buy at all.
Expert Guidance: Our team is well-versed in the nuances of the UK housing market. We offer insights into affordable housing options and potential growth areas, ensuring you make a sound investment for your future.
Financial Counselling: Recognising the financial challenges many face, we've partnered with financial experts. They provide invaluable advice on saving, budgeting, and exploring alternative financing options, ensuring you're well-equipped to navigate the financial maze of property buying.
Shared Ownership and Other Schemes: For those daunted by hefty deposits, we introduce schemes that require smaller initial investments. Shared ownership options, for instance, can significantly reduce the financial burden, making homeownership more accessible.
While the "bank of family" trend underscores the challenges in today's housing market, it's essential to remember that professional guidance can make a world of difference. At Coakley & Theaker, we're committed to helping you navigate these challenges, ensuring your home-buying journey is as smooth and successful as possible. Reach out to us today, and let's make your homeownership dream a reality.
Bernie Hickman, the chief executive of Legal & General Retail, said: “Family wealth is increasingly becoming a prerequisite for home ownership, effectively locking some groups out of the housing market for years while they save for deposits, or even altogether. 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.”
Aneisha Beveridge, a leading name in terms of research in the UK housing market has spoken about the Bank of Mum and Dad, saying: “As home ownership rates decline through the generations, younger parents today are less likely to be homeowners than their predecessors, which reduces their ability to withdraw equity from their home to pass on to children. Rather, first-time buyers are increasingly leaning towards other family members to boost their deposits.”
At Coakley & Theaker, we aim to support the local community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today by calling us on 01284 769691.