Many people are being forced to depend on the ‘Bank of family’ in order to step onto the property ladder due to the cost of housing. – uncovered by new data from Legal & General and the Centre for Economics and Business Research.
Research shows that these recipients receive varying amounts depending on where they live rather than the cost of the house. Those from the east of England are gaining the most support with the average being around £32,100 whereas those in the west midlands are receiving £19,800 on average.
Gifts from the ‘Bank of family’ is also dependent on the area in which the individuals live in e.g. rural or urban areas, families of those who are purchasing urban homes were twice as expected to support them as those purchasing homes in rural areas.
Homeowners purchasing properties in towns and cities are more likely to lean on the bank of family, houses in these areas are typically more expensive due to location therefore they need to borrow more. In 2023 families were estimated to have gifted around £5.7 billion towards urban homes equating to 70% of the ‘bank of family’ equating to £82bn worth of housing in 2023 alone.
Buyers in London are more likely to receive financial aid from family, research shows that the Bank of family supported two-thirds of recent buyers in London which is more than double the north west at 36% as the runner-up. This is possibly due to the price of an average house in London being nearly double the average price of a house elsewhere (534,000 versus £286,005).
However, there isn’t always a direct correlation between house prices and the size of a bank of family gift, those from the east of England have the highest amounts of money received from family towards homeowners at £32,100 which is even higher than London.
“Up and down the country, the Bank of family is making significant financial sacrifices to help family members onto the housing ladder. Support is concentrated in urban and southern areas, where house prices are the highest, but is prevalent across the UK. While a brilliant lifeline for those able to draw on it, many people will not have access to such generosity and this widespread support is indicative of deep, underlying affordability issues affecting the UK.”- Kevin Roberts, managing director and legal mortgage services.
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