Key Partnerships has found that parents and grandparents are increasingly working together to help first-time buyers.

Its nationwide study among estate agents found that 47% have seen a rise in first-time buyers relying on financial support from their parents and their grandparents. The study shows just 18% of estate agents have not seen any increase in first-time buyers needing financial help in the past year.

Parents are slightly more likely than grandparents to be the sole financial backer for first-time buyers, the research found.  Around 35% of estate agents have seen a rise in parental help while 32% report an increase in grandparents providing financial support.

However, just 36% of estate agents are aware that equity release plans, which enable over-55s homeowners to access property wealth without paying interest and repay the loan when they go into care or die, can be used to help first-time buyers raise deposits.

Key Partnerships said there is also the additional benefit that access to a larger deposit can have and that is typically a lower interest rate on the first time buyers’ mortgage due to a reduced LTV.

Bank of England data shows the average 95% LTV two-year fixed rate is 3.66% while borrowers with a 25% deposit will pay less than half that at 1.42% for a 75% LTV two-year fixed rate. Monthly repayments at 3.66% on £100,000 would be £509 compared with £396 at 1.42% over 25 years.

Will Hale, director at Key Partnerships, said: “Increasingly it is taking two generations to help first-time buyers on to the housing ladder with Bank of Mum and Dad having to work with the Bank of Gran and Grandad.

“Very few first-time buyers are able to raise the money for a deposit without financial support which is putting financial pressure on parents and grandparents. That is fine if they can afford it but there must be a concern that many are risking their own financial futures to help their family.

“Estate agents are valued as a source of financial guidance and it is clear that those who can discuss equity release as a potential alternative fund-raising solution will be able to benefit from an additional revenue stream by referring potential clients to a specialist as well as securing more house sales.”