It is a well-trodden path for first-time buyers to knock on the door of the Bank of Mum and Dad for help with their deposit.
But now families who already own a home are tapping their parents for tens of thousands of pounds to help them climb to the next rung of the property ladder, new research reveals.
One in five of the so-called ‘second steppers’ have received help from family and friends to buy a bigger and better home, data from Barclays today shows.
Beleaguered families wanting to buy bigger properties face soaring house prices and stretched affordability
In fact, parents are gifting more to these middle-aged homeowners who are climbing the ladder than cash-strapped first-time buyers. The average amount gifted to a second-time buyer for their next home is £81,451 – an extra £5,200 compared with the average £76,239 given to first-time buyers.
Soaring house prices which climbed by 2.6 per cent to £272,000 in the year to September combined with surging rental costs mean it is becoming increasingly out of reach for a first-time buyer to build a 10 per cent deposit without help from their parents.
But those who already own a home are also beleaguered by high monthly mortgage payments and stretched affordability due to stagnant wage growth.
And while mortgage costs have started to fall amid a furious rate war, they are still a far cry from the troughs seen just five years ago.
In turn, this makes it harder to buyer a bigger, more expensive home, even though it may be more suitable for a growing family. It means second time buyers, often in their 40s, are being forced to turn to their parents for help.
Plus, nearly three in ten of second or third-time homeowners who received financial help for their current home also had assistance for a previous property. It means the Bank of Mum and Dad may have shelled out more than £100,000 for each child’s property.
The most common form of help was lump-sum gifts from parents followed by an inheritance windfall and a loan from family and friends, Barclays said.
Jatin Patel, of Barclays, said: ‘Though first-time buyers are often thought of as the main beneficiaries of the Bank of Mum and Dad, the reliance of second-steppers on family support underlines the impact of cost-of-living pressures.’