More than 100,000 first-time buyers have needed financial support from their families in order to take their first step onto the property ladder since the crash.
A Centre for Economics and Business Research report, commissioned by HSBC, found that the number of FTB transactions between 2008 and 2011 would have 13.4 per cent less were it not for the help provided by the ‘bank of mum and dad.’
In a typical year, family financing contributed towards 19 per cent of all FTB home purchases in the UK.
Cebr economist and chief author of the report Daniel Solomon says: “Mortgage lending to British FTBs fell off a cliff during the financial crisis. To some extent, families have moved in to fill the gap – providing gifts and loans to their first-time buyer relatives. Families’ contributions have been invaluable, helping thousands to get on to the housing ladder who would have missed out otherwise.
“Families have really stepped up to the plate – supporting relatives who want to buy their first home. Now that so many first-time buyers are having difficulty getting the mortgages they would like, gifts and loans from families have become crucial to their financing mix.”
Looking ahead, the report estimates that by 2017 £5.1bn worth of FTB deals will be impossible without financial support from buyers’ families – equivalent to 2011.