A fifth of ‘second-steppers’ received financial help from friends or family to buy their home
- ‘Second-steppers’ who had financial help received £81k on average towards purchasing their home
- Three in 10 second or third-time owners who received financial help for their current property, say they also received support for a previous home
- Barclays data shows spending on rent and mortgages rose by 3.5 per cent year-on-year in November, the smallest increase since January’s uplift of 2.0 per cent
- Half of those who intend to move in the next year say they had paused their plans in anticipation of the Budget but are now resuming them following the announcement
- Barclays Property Insights analyses proprietary mortgage data alongside consumer research to uncover the key trends shaping the UK housing market
Barclays’ latest Property Insights report reveals that the influence of the ‘Bank of Mum and Dad’ now extends well beyond first-time buyers, playing a pivotal role for ‘second steppers’. For renters, deposits remain a challenge, but they are less deterred by the cost of mortgages. Meanwhile, consumer confidence showed modest signs of recovery following the Autumn Budget, as prospective buyers resume plans they had put on hold.
Financial assistance from family and friends remains a driving force behind UK homeownership, with nearly one in five owners (19 per cent) saying they received support to buy their current property. This rises to 30 per cent among first-time owners and 20 per cent for second-timers, who received on average £76,239 and £81,451 respectively. These are also often repeated gifts, as nearly three in 10 (27 per cent) owners who had financial help for their second or third homes also report receiving support for their first property.
Amongst those who received financial help, the most common forms of support were lump sum gifts from parents (39 per cent), inheritance (27 per cent), and loans from family or friends (13 per cent). Renters also report the necessity of familial support as half (52 per cent) say they would find it impossible to buy a home without an inheritance or loan from a family member.
First-time buyers held back by the cost of property, but not mortgages
Nearly one in six renters (16 per cent) say they plan to buy property in the next year, yet over two thirds (68 per cent) of these prospective buyers say property prices are an obstacle to achieving that goal. Six in 10 (59 per cent) also cite struggling with ‘moving goalposts’, with the savings goal from the outset increasing to keep pace with price growth. Conversely, mortgage costs form less of a hindrance, with 40 per cent of renters saying it currently costs more to rent than it would to pay a mortgage on a similar home. This comes as rent and mortgage spending growth slowed in November, rising 3.5 per cent year-on-year, the lowest increase since January (2.0 per cent).
Post-Budget confidence mixed, but purchasing plans resume
Despite market sluggishness, consumer confidence in the housing market rose slightly to 26 per cent in November, following an annual low of 24 per cent in October. Post-Budget, most UK adults say their confidence in their ability to buy a home is unimpacted (58 per cent), though just over a quarter (27 per cent) feel their confidence has decreased. Meanwhile, half (50 per cent) of those who intend to move in the next year say they had paused their plans in anticipation of the Budget but are now resuming them following the announcement.
Homeowners seek cost savings as they remortgage
Across the market, nearly one in five (17 per cent) mortgage holders report that they have either already remortgaged this year or expect to do so next year. Six in 10 (58 per cent) of those remortgaging anticipate higher monthly costs. As a result, 37 per cent of homeowners are proactively reviewing their budgets to identify savings, while 34 per cent plan to cut back on discretionary spending such as takeaways and beauty treatments. For their new deals, keeping monthly payments low is the top priority for 35 per cent, while 29 per cent seek the lowest rate available, regardless of lender. However, a quarter (24 per cent) would still prefer to remortgage with their current provider rather than switching lenders.
Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said: “Our latest data highlights a market in transition. Though first-time buyers are often thought of as the main beneficiaries of the Bank of Mum and Dad, second-steppers’ reliance on family support underlines the impact of cost-of-living pressures on all sections of the market.
“Even as property prices remain a major challenge for first-time buyers, it is encouraging that improvements to affordability mean more renters are able to access the finance they need to become homeowners.”
Julien Lafargue, Chief Market Strategist at Barclays, said: “With the Budget now published, clarity has improved allowing economic actors to start planning ahead. For the property market, this should mean greater level of activity as we move into the New Year.
“That said, affordability remains a challenge which can be overcome through a combination of lower interest rates, greater housing availability, and financing innovation.”
For those ready to buy a home, Barclays offers Mortgage Boost, which allows family and friends to give support, without needing to provide a lump sum. Their income is used to help buyers borrow more, by joining the mortgage without owning the property.
You May Also Enjoy
Clarity on energy efficiency rules for commercial property needed
English Housing Survey 2024 to 2025
Propertymark responds to latest HMRC property transactions report
Mortgage activity dips in December
£19.9bn of PRS refurbishment required
