With ongoing affordability challenges, many first-time buyers are turning to family for support to get onto the property ladder. The ‘Bank of Mum and Dad’ has become a vital source of funding.
The ‘Bank of Mum and Dad’ continues to play a significant role in the UK housing market, contributing an estimated £9.6 billion each year towards property purchases. The average gift amount given to first-time buyers is typically around £55,000 – more in London due to higher property prices between £60,000 to £100,000. Supporting over 300,000 buyers annually, the ‘Bank of Mum and Dad’ has even been described as one of the UK’s largest unofficial ‘lenders’.
For many families, providing financial support is not just about gifting money – it’s about creating opportunities, offering stability and helping loved ones take an important step towards long-term security. At MB Associates, we work closely with families to ensure this support is structured carefully, efficiently and in a way that protects everyone involved.
Below are two real-life examples of how thoughtful planning can make a meaningful difference.
A Gifted Deposit
Sarah and James had steady incomes but found it difficult to save a sufficient deposit while renting, particularly given the high property prices in Surrey. Homeownership felt increasingly out of reach.
After speaking with us, they explored the option of family support. Sarah’s parents were keen to help but wanted to ensure everything was done correctly and in line with lender requirements.
With the right guidance, they provided a £30,000 gifted deposit. This was carefully structured to meet mortgage criteria while ensuring clarity and protection for all parties involved.
As a result, Sarah and James were able to secure a mortgage and purchase their first home much sooner than expected. What once felt like a distant goal quickly became a reality, demonstrating how the right support can transform a buyer’s position.
Supporting the Next Generation
In another case, a client in her 70s was in a strong financial position, with a comfortable pension and assets exceeding the Inheritance Tax nil rate band. She wanted to help her four grandchildren, all in their 20s, who were renting and struggling to save for deposits.
Following advice from her accountant, she explored later-life lending options and was introduced to a lifetime mortgage. This provided the flexibility to release equity from her home, with no requirement to make monthly repayments – though she had the option to do so if she wanted.
She was able to gift £50,000 to each grandchild as an early inheritance. Legal advice ensured the wider family wealth remained protected and structured appropriately.
The impact was significant. She was able to see the benefits of her support during her lifetime, without affecting her own lifestyle or security. Her grandchildren were able to purchase homes sooner than expected, moving out of rented accommodation and into more stable, affordable homeownership. The larger deposits also allowed them to access more competitive mortgage rates.
Ultimately, this approach enabled wealth to be passed on in a controlled and tax-efficient way, while giving the next generation a meaningful financial head start.
If you have any questions about the ‘Bank of Mum and Dad’ and helping your children or grandchildren onto the property ladder, we’re here to help.