In today’s property market, the Bank of Mum and Dad has become one of the UK’s most generous lenders without even being a bank. Parents and grandparents across the country are stepping in to help first-time buyers bridge the affordability gap, gifting or loaning money to secure deposits and better mortgage rates. But with generous support comes responsibility. Here’s how to navigate this financial path wisely.
Recent research from Legal & General and Cebr reveals that the Bank of Mum and Dad is playing a pivotal role in revitalising the UK housing market. As the country navigates post-pandemic economic challenges, nearly 1 in 4 property purchases in 2020 were financed with family support, underscoring the growing reliance on intergenerational support.
With 24% of borrowers turning to parents, relatives, or close friends for financial assistance, it’s clear that the Bank of Mum and Dad is not just a trend. It’s now a cornerstone of modern homeownership. As we navigate uncertain economic conditions, family-backed deposits are poised to shape the first-time buyer market and influence how advisers structure lending.
For practical tips on how advisers can navigate this shift, see our guide on Mortgage Advice for First-Time Buyers. If you work with clients relying on family support, you may also benefit from joining a Mortgage Network for Advisers that offers guidance on lender criteria for gifted deposits and intergenerational finance.
Is It a Gift or a Loan?
Before money changes hands, clarify the terms. Will this be a non-repayable gift, or an informal family loan? The answer can affect not only mortgage affordability checks but also future family dynamics.
For true gifting, lenders typically require a gift letter confirming that no repayment is expected. If the funds are intended to be repaid, it may count against the borrower’s mortgage affordability.
👉 Need help structuring it? Our Mortgage Advice for First-Time Buyers guide breaks down the dos and don’ts.
Growing Dependence on the Bank of Mum and Dad
In the wake of the pandemic, nearly 1 in 4 homebuyers are turning to the Bank of Mum and Dad to bridge the affordability gap. While the housing market pause in early 2020 temporarily reduced parental contributions to £3.5 billion, family support still underpinned an estimated £50 billion in UK property transactions that year.
Today, intergenerational wealth transfers are increasingly strategic. Around 25% of property funders are now using inheritances or legacy wealth to help adult children step onto the property ladder. Looking ahead, 33% of aspiring homeowners say they’ll rely on financial gifts or loans from family and friends to buy within the next five years.
For mortgage advisers navigating this shift, understanding lender attitudes toward gifted deposits is essential. Explore how the Bank of Mum and Dad continues to reshape homeownership and how advisers can add value at every step.
The Bank of Mum and Dad: Fueling the Post-Lockdown Property Market
The Bank of Mum and Dad, one of the UK’s most influential financial forces, was projected to lend around £3.5 billion to loved ones this year. That’s a notable drop from £6.3 billion in 2019, representing 85,000 fewer home purchases.
This decline was primarily attributable to the COVID-19 lockdown, which caused the housing market to grind to a halt. According to HMRC, property transactions nearly halved in Q2 2020, underscoring the market’s dependence on family-funded deposits.
Resilience and Recovery: BoMaD Bounces Back
Despite market disruption, the Bank of Mum and Dad (BoMaD) remains a mighty pillar of the UK housing sector. It is forecasted to support approximately 175,000 transactions in 2024, underpinning over £50.3 billion in property value.
This intergenerational financial support is proving indispensable as buyers, especially first-time buyers, return to the market in a high-cost environment. With deposit-saving still a barrier, families are stepping in to close the affordability gap.
In this new normal, BoMaD’s role has evolved not just as a generous gesture but as a strategic financial bridge. Learn how mortgage advisers can guide families through smart, structured support.
Post-Pandemic Generosity: A New Era for BoMaD
A recent study by Legal & General found that the pandemic has amplified BoMaD generosity. In 2024, the average parental or family contribution is expected to reach £20,000, a strong signal that families are leaning in rather than stepping back.
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15% of family lenders have increased their financial contributions since the onset of the pandemic.
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18% of those report giving at least 50% more than before COVID-19.
This rising trend reflects a seismic shift in family financial dynamics, with the Bank of Mum and Dad playing an even more proactive role in tackling housing affordability challenges.
If you’re advising clients through complex family contributions, our Specialist Mortgage Network for Advisers can help streamline advice and ensure compliance.
Regional Trends: Where BoMaD Gives Most
Family generosity isn’t evenly spread across the UK. Here’s how BoMaD contributions vary by region:
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London – Homebuyers here receive the highest average support, at £25,800 per transaction.
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East Midlands – Contributions surged from £16,000 (2019) to £24,100 (2020).
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North East & Yorkshire – The lowest average at £13,800, yet still vital for many buyers.
These variations reflect regional property prices, income levels, and cultural norms around gifting. As the market becomes increasingly unaffordable, family-funded deposits are no longer the exception; they’re the enabler.
Want more data? Download the full Bank of Mum and Dad Report for a deep dive into these trends.
The Bottom Line
As the market stabilises post-lockdown, the Bank of Mum and Dad continues to drive housing activity. Its adaptability through gifts, informal loans, and strategic support helps families unlock homeownership when traditional savings fall short.
Mortgage professionals should stay ahead of this trend. Aligning with a strong mortgage network ensures you can confidently support family-backed buyers through compliant, lender-ready solutions.
Thank you for reading our publication, “The Bank of Mum and Dad | Smart Gifting for Homebuyers.” Stay “Connect“-ed for more updates soon!