First-time buyers facing huge deposits even with the help of the Bank of Mum and Dad

The latest research by Yopa, the full-service estate agents, has shown that, even with the help of the Bank of Mum and Dad, the average first-time buyer is still required to save as much as £36,000 in order to get their first foot on the property ladder.

Yopa analysed figures from Legal and General on the contribution made from the the Bank of Mum and Dad*, how this has changed over the years, and just how much first-time buyers still need to save in the current market in addition, in order to afford the average home.

The figures show that the Bank of Mum and Dad helped to fund an estimated 318,400 purchases in 2023, with families loaning first-time buyers a hefty £8.14bn in order to climb the ladder.

But despite this generosity, Yopa’s research reveals that buyers are still having to find significant amounts of money to bridge the gap between what their family can lend, and what the property costs.

The average first-time buyer home in Britain currently costs £237,655. This means the amount of money required for a 15% deposit is £35,648.

However, the average family contribution towards a purchase is £25,600. This means that even with the incredibly generous support of loved ones, buyers are still having to contribute an additional £10,048 to cover the cost of the deposit.

From analysing the numbers on a regional level, it’s clear that buyers in some areas of Britain need to be able to provide an even more significant amount of money to top up a family loan.

Take, for example, London. The average first-time buyer house price in the capital is £440,322 which means the average deposit required is £66,048.

The Bank of Mum and Dad contributes an average of £30,200 in London, more than anywhere else in Britain, but this still means that the buyers themselves have to provide a massive £35,848. Put another way, family lending in the Big Smoke is only covering 47% of the required funds.

In the South East, family contributions cover 59.4% leaving the buyers to find an additional top-up of £18,212. In the South West, the Bank of Mum and Dad covers 64.5% of the deposit leaving £13,897 to be found by the buyer.

In other areas of Britain, however, the Family Bank is able to cover a much larger proportion of the required funds.

In the North West, families are contributing an average of 87.8% of the deposit. In Scotland, they’re putting up 90.9% of the deposit, and in Yorkshire & Humber they’re contributing 91.6%.

But, in the North East, the Bank of Mum and Dad is able to cover the entire cost of the deposit and then some.

The average first-time buyer house price in the North East is £134,621, thus requiring a 15% deposit of £20,193. The average family contribution comes to £20,200, which means the deposit can be paid in full.

CEO of Yopa, Verona Frankish, said, “It’s no secret that a huge number of first-time buyers are only able to get onto the housing ladder because of significant help from generous family members. This has always been the case and the Bank of Mum and Dad helps hundreds of thousands of first-time buyers onto the ladder every year.

However, with house prices continuing to climb in recent years, the Bank of Mum and dad is lending considerably more today than it has previously and even with this contribution, the average first-time buyer is still required to save a hefty sum themselves.”