Gifts and loans from the Bank of Mum and Dad amounted to a total £8.8bn in 2022, according to new analysis from Savills.

The property firm highlighted that the figure has increased by almost £4bn since 2019 and before the COVID pandemic, as a result of a “more stringent mortgage market” and higher deposit requirements.

In total, 170,000 first-time buyers had family assistance in getting their mortgage in 2022, accounting for around 46% of all mortgaged first-time buyers, down from a peak of 198,000 in 2021.

However, Savills suggested this number could jump to 61% in 2023, a figure not seen since before the Help to Buy scheme was introduced. This means that just two in five first-time buyers are likely to access the market without any help.

“Whilst many homebuyers enjoyed record low-interest rates during much of 2020 and 2021, mortgage rates for high LTV mortgages, most commonly used by first-time buyers, increased, and so it was more necessary for those who were able to, to take advantage of family support to try and secure a deal at a lower rate,” said director of residential research at Savills, Frances McDonald.

“Not only are they facing higher interest rates, many are also continuing to struggle to ensure their savings keep pace with rising average deposits, particularly as rents have also increased and inflation impacts the cost of living.”

Higher mortgage rates and the end of Help to Buy are expected to increase lending from the Bank of Mum and Dad, Savills added.

The property firm has forecast that mortgaged first-time buyer transaction numbers will fall back to approximately 200,000 in 2023, 43% below the pre-pandemic norm. However, the proportion of first-time buyer purchases receiving support is expected to increase from 46% in 2022 to 61% in 2023 – with three in every five buyers expected to receive support.

Savills said the total contribution of gifts and loans is also expected to fall, as a reflection of overall transaction numbers in 2023. However, it is still expected to total £26bn over the next three years between 2023 and 2025.

McDonald added: “Since the Help to Buy scheme was introduced in 2013 it has supported more than 335,000 first-time buyers – providing £2.2bn of financial assistance in 2022 alone – bringing the total support received by first-time buyers to more than £11bn.

“With no obvious scheme expected to replace the support provided, a far greater proportion of buyers will be relying on family members to help them to take their first step onto the property ladder.”

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