Family financial support is playing an increasingly decisive role in shaping the homeownership prospects of first-time buyers exposing a widening affordability gap in the UK housing market.

As housing affordability continues to strain household budgets, the gap between those with and without family financial support is becoming more entrenched – reshaping the first-time buyer landscape across the UK.

New data from UK Finance reveals sharp differences in age, income, deposit size and purchase price between first-time buyers (FTBs) who receive financial help from family and those who do not.

ASSISTED BUYER BOOST

Nationally, assisted buyers were able to enter the market at just over 30 years old, on average, with household incomes of £56,000. In contrast, unassisted buyers were typically over 32 and required household incomes averaging £65,000 to achieve the same goal – yet often ended up purchasing less expensive properties.

Despite earning less, assisted buyers benefit from significantly larger deposits, enabling them to secure more expensive homes.

Nowhere is this disparity more pronounced than in London, where FTBs without support put down average deposits close to £150,000 in 2024. Those with family backing put down nearly £225,000 – highlighting the critical role intergenerational wealth plays in one of the UK’s most competitive housing markets.

The trend extends beyond regional disparities and into broader policy outcomes.

STAMP DUTY IMPACT

UK Finance also assessed the effects of the temporary stamp duty holiday introduced during the pandemic.

Intended to stimulate the market during economic uncertainty, the policy disproportionately benefited those already positioned to receive financial assistance. The reduced transaction costs coincided with a marked increase in assisted first-time buyer transactions, pointing to a policy that accelerated entry for the already advantaged.

At the same time, lenders recorded a rise in the number of borrowers extracting substantial equity from their homes during remortgages, suggesting that many households were using property wealth to help younger family members onto the housing ladder.

BALANCED APPROACH

James Tatch, UK Finance’s Head of Analytics, said: “First-time buyers are essential to the UK housing market, helping to unlock transactions further up the chain and maintain overall liquidity.

“While the majority of first-time buyers are still managing to purchase without help, the growing reliance on family support risks deepening inequality in the housing market.

“A balanced approach which addresses both supply and affordability issues is essential to ensure the door to homeownership remains open to all.”

STILL WORK TO BE DONE

And Toby Leek, NAEA Propertymark President, added: “These figures demonstrate that there is still much work to be done to help first-time buyers get onto the property ladder, and that for many people under the age of 30, home ownership is not a realistic aspiration without financial support from parents.

“With interest rates higher than many people are used to and the average deposit needed to purchase a home now sitting around £50,000, it is imperative that further support is available and all Governments across the UK fulfil their housing targets to help even out demand and supply levels in the long-term.”