Key points –
- London has the highest percentage of homebuyers using family inheritance for property purchases, with 18% relying on this method.
- The East of England sees significant family support in home buying, with a third of homeowners there receiving either parental loans or inheritance.
- Younger buyers, especially those aged 25 to 34, are most likely to receive family support, including inheritance and parental loans, for home purchases.
- A notable portion of 18–24-year-olds are using cryptocurrencies for property transactions, contrasting with the overall low usage of this method among other age groups.
Data from Thirdfort, a compliance platform, reveals a significant shift towards using family inheritance to fund property purchases, particularly in London. This phenomenon is not limited to the capital, as regions across the UK show varying degrees of reliance on inherited wealth for stepping onto the property ladder.
London Leads the Way
In London, 18% of homebuyers report using family inheritance as a key source of funding. This figure surpasses other regions like the East of England (16%) and the South (14%). The Midlands (10%), Scotland (9%), and Wales (8%) show less dependence on inheritance for home buying.
The Role of Family Support Across the UK
The YouGov survey, involving 2,054 UK adults, sheds light on the broader trend of family support in property buying. The East of England emerges as a region with high levels of family assistance, where a third of homeowners benefit from either a loan from parents or inheritance. London follows closely with 31% of homeowners receiving such support. Contrastingly, the Midlands (19%) and Scotland (15%) see significantly lower levels of familial financial help.
Younger Buyers Relying More on Family
Among different age groups, those aged 25 to 34 are most likely to lean on family support, with 41% using inheritance or loans from parents. The 35 to 44 age bracket is not far behind, with 37% relying on similar means.
Regional Breakdown of Family Assistance
- North: 22% (11% inheritance, 11% parental loan)
- Midlands: 19% (10% inheritance, 9% parental loan)
- East: 33% (16% inheritance, 17% parental loan)
- London: 31% (18% inheritance, 13% parental loan)
- South: 27% (14% inheritance, 13% parental loan)
- England (NET): 25% (13% inheritance, 12% parental loan)
- Wales: 20% (8% inheritance, 12% parental loan)
- Scotland: 15% (9% inheritance, 6% parental loan)
- Northern Ireland: 28% (14% inheritance, 14% parental loan)
The Rise of Cryptocurrencies in Younger Buyers
An intriguing aspect of the survey is the use of cryptocurrencies in property transactions. A notable 14% of 18–24-year-olds are turning to this digital asset, a stark contrast to the mere 1% of homeowners overall. No buyers over the age of 45 reported using cryptocurrencies for property purchases.
Diverse Sources of Funding
The research highlights a variety of funding sources for home buyers:
- Savings: 59%
- Employment Income: 46%
- ‘Bank of Mum and Dad’ Support: 25% (13% inheritance, 12% parental loan)
- Investments: 8%
- Business Ownership: 2%
Ensuring Legitimate Funding
Olly Thornton-Berry, co-founder and managing director of Thirdfort, emphasizes the complexity and necessity of verifying the legitimacy of these diverse funding sources. While savings and employment income are straightforward to verify, gifts and investments pose risks. Thus, it’s crucial for both home buyers and property professionals to employ the latest tools and technology to secure safe and legitimate transactions.