Aspiring homeowners in the UK are becoming more reliant on the “bank of family” in order to support their house purchases, new data from Legal & General (L&G) and the Centre for Economics and Business Research (CEBR) has found.

The report by the two groups stated that support from family varies across the country, although levels of gifting does not closely align with house prices within a certain region.

Borrowers in the East of England are receiving the most support in house purchases, with borrowers receiving £32,100 on average.

The West Midlands is the region where borrowers receive the least support from family, receiving, on average, £19,800 from the ‘bank of family’.

The report found that homebuyers in towns and cities are not only more likely to lean on the ‘bank of family’ to buy a home, but they often need to borrow more than those in rural areas.

Buyers in London are far more likely to receive support from family members when purchasing a property, with house prices in the capital standing at almost double the average house price nationwide in April 2023.

The report also found that the bank of family supports two-thirds (67%) of house purchases in the capital, which is more than double the proportion of the second place region, which is the North West, where 36% of purchases are supported by family members.

L&G and CEBR have estimated that the bank of family will gift £5.7bn towards urban home purchases in 2023, accounting for 70% of the support given through gifting and two thirds (67%) of transactions it facilitates. This equates to roughly £82bn worth of housing in 2023.

Managing director at L&G Mortgage Services, Kevin Roberts, said: “Up and down the country, the bank of family is making significant financial sacrifices to help family members onto the housing ladder. Support is concentrated in urban and southern areas, where house prices are the highest, but is prevalent across the UK. While a brilliant lifeline for those able to draw on it, many people will not have access to such generosity and this widespread support is indicative of deep, underlying affordability issues affecting the UK.

“The bank of family has not only become a major lender – the ninth largest in the UK if it were a formal entity – but also a significant source of financial advice, with less than 40% of financial aid recipients seeking professional guidance before their transactions. The gender dynamics at play are also fascinating. 46%, women are far more likely to speak to a professional adviser than men at 30%. In comparison, men are much more likely to depend on advice from friends than women, at 42% compared to just over a quarter (29%).”

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