"It appears that Bank of Mum and Dad could be starting to struggle to support their children’s property ambitions to the same extent as in previous years."
- Brian Byrnes, head of personal finance at Moneybox
The Bank of Mum and Dad may not be as prevalent as it once was, with the percentage of first-time buyers planning to buy with their own savings rising by 57% in the last year, according to new research from Moneybox.
In a survey of 1,000 would-be homeowners, the majority (76%) said they plan to buy their first home with their own savings. Just 20% expect to receive financial support from their family to help them raise a deposit and 20% of respondents hope to benefit from inheritance.
Saving a suitable deposit remains one of the biggest challenges many first-time buyers face. Last year, Moneybox Mortgages customers paid £66,000 on average (mean) on their first home deposit, with a median deposit of £35,000.
However, in the last six months, aspiring homeowners have had to reduce how much they save towards their deposit each month by 18%. In May 2023, first-time buyer hopefuls were saving on average £344 per month. This figure has since decreased to £287 a month, and one-third of respondents have had to save for longer than planned to raise a larger deposit.
Despite persistent cost of living pressures, half of those surveyed feel they are closer to buying a property now than six months ago and 17% were even able to increase the amount they save towards their deposit in the last six months.
Among those surveyed, the most popular savings products used to build a first home deposit were easy access savings accounts (43%), cash ISAs (37%) and the Lifetime ISA (17%), showing that many first-time buyers are potentially missing out on free money by not making the most of the right saving vehicles to boost their deposits.
Brian Byrnes, head of personal finance at Moneybox, commented: “While owning a home is still a top financial goal for most people, it appears that Bank of Mum and Dad could be starting to struggle to support their children’s property ambitions to the same extent as in previous years. As the cost of living puts pressure on household finances the obstacles facing prospective homeowners have only increased in the last year. Affordability and saving a suitable deposit are among the biggest concerns and it is clear that more support is needed to help the next generation of home buyers navigate the changing market conditions.”