Filling the funding gap

By: Jake Jeffries     On: December 22, 2020

Filling the funding gap

Bank of Mum and Dad is playing an ever-present role in the housing market

Across the UK, parents, grandparents, family and friends have been reaching into their pockets to help young, hopeful buyers and even growing families to make their housing plans a reality. These generous lenders are often funding most or all of the deposit buyers need to step onto or up the ladder.

To a large extent the Bank of Mum and Dad is filling the gap left by High Street mortgage lenders, many of whom have stopped offering high loan-to-value deals and/or have tightened criteria. Research shows that one in every two first-time buyers aged under 35 have received financial support from the Bank of Mum and Dad, with more than half (56%) of those under the age of 35 using a financial gift to help them step onto the housing ladder[1].

Financial support
In a further sign that the Bank of Mum and Dad is playing an ever-present role in the housing market, 71% of these new homeowners say they would not have been likely to buy without this financial support. Instead, they would have had to delay their housing plans by four years on average.

The research follows earlier findings which showed that the Bank of Mum and Dad is stepping in to support loved ones as the economic impact of the coronavirus (COVID-19) pandemic takes hold. A third (33%) of all people looking to buy in the next five years plan on getting financial help from family or friends.

First-time buyers
Last year the Bank of Mum and Dad played an active role in 73,160 property purchases among those aged under 35 in 2020. That’s only an 8% decrease from 2019 transaction levels (79,631). The research also shows that the Bank of Mum and Dad is lending on average £19,000 to first-time buyers under the age of 35, with 21% of respondents in this age bracket saying they received more than £30,000.
In total in 2020, the under-35s received
£1.36 billion in Bank of Mum and Dad contributions, helping them to purchase
£18.11 billion worth of property. However, not all first-time buyers will receive the funding as a gift, with 30% expected to pay at least some of it back.

Total lending
It’s not just the under-35s that need financial support from the Bank of Mum and Dad, however. Financial support for home purchases by those aged over 35 will account for
£2.14 billion, or 61% of the Bank of Mum and Dad’s total lending in 2020.
While it’s likely that this high figure is in part due to older first-time buyers looking for larger, more expensive properties as a home for their growing families, the Bank of Mum and Dad will still be behind 101,800 transactions among the over-35s – that’s around 30,000 more Bank of Mum and Dad supported purchases than in the under-35s age group.

Loved ones
Even one in ten (9%) people aged over 55 planning to buy said they would have had to delay their purchase without financial support from the Bank of Mum and Dad.

With so many relying on the Bank of Mum and Dad for funding, and the country facing up to the economic implications of COVID-19, the Bank of Mum and Dad lenders themselves are still eager to help out. Nearly 74% of those who have seen their incomes fall during the pandemic say the crisis has made them no less willing to help loved ones onto the housing ladder.

Source data:

Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.For more information please visit

Recent News

Building a reliable income stream for your golden years

Learn more

Will you make the right decisions around your pension pot?

Learn more

Preserving wealth for future generations

Learn more