The Halifax has published research into first-time buyers showing the heavy year the Bank of Mum and Dad has experienced.
The average price paid by a first-time buyer in the UK last year was £256,057. This was up by £22,939 (10%) from a year earlier (£233,118).
How much of this came from the Bank of Mum and Dad?
The average deposit put down by a first-time buyer in 2020 was £57,278, compared with £46,449 in 2019. This was a rise of over 23% (£10,829). While the Halifax does not comment on why there was such a large jump, it may have something to do with the disappearance of many high loan-to-value mortgages which occurred during the first part of the pandemic. These have gradually re-emerged towards the end of the year.
£57,278 is a substantial deposit. It equates to just under a quarter of the average purchase price. In 2017 the corresponding figure was 15.7% (£33,339). A deposit of more than £57,000 is out of the reach of most first-time buyers without help.
How can I know whether I can afford to help?
One area we specialise in is running the numbers. This can show the effect of giving money away could have on your wealth and financial health. Nothing is guaranteed but it can allow us to see what the effects could be and start preparing for them.