The latest findings from Yopa, show that the road to homeownership is looking more like scaling a financial Mount Everest for first-time buyers in Britain, despite the assistance from the ever-reliable “Bank of Mum and Dad.”
Yopa’s research sifts through data from Legal and General, showing the significant contributions families are making to help their loved ones ascend the property ladder. In 2023 alone, an astonishing 318,400 property purchases were bankrolled with the help of £8.14 billion from family funds. This monumental effort underscores the lengths to which families are willing to go, to support the aspirations of first-time homeowners.
However, this financial backing is still not enough to fully cover the steep costs associated with purchasing a home. The average price of a first-time buyer’s home in Britain now stands at £237,655. With a 15% deposit requirement, this translates to a savings goal of £35,648 – a towering figure that looms large over hopeful buyers.
Even after receiving an average family contribution of £25,600, a gap of £10,048 remains. This gap represents a significant hurdle that first-time buyers must overcome to secure their dream homes, highlighting the persistent challenge of affordability in the housing market.
A Tale of Regional Variance
Diving deeper into the numbers, Yopa’s analysis unveils a patchwork of markets across Britain. In London, the dreams of homeownership are particularly elusive, with the average deposit for a first-time buyer home soaring to £66,048. Here, the Bank of Mum and Dad stretches its resources the furthest, offering an average of £30,200, yet this still leaves a staggering £35,848 for the buyer to muster.
Conversely, regions like the North East present a glimmer of hope, where the average family contribution of £20,200 is enough to cover the entire deposit requirement, showcasing a stark contrast in the financial dynamics of home buying across different areas.
The Unyielding Rise of Home Prices
Verona Frankish, CEO of Yopa, reflects on the enduring significance of family support, “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.”