The Bank of Mum and Dad is experiencing a decline in gifts to first-time buyers, with fewer families providing cash or inheritance, research by Tembo and Gen H found.
In 2024, the number of first-time buyers receiving cash or inheritance from family declined by over 11% from 45% to 40%.
This drop in cash gifts contributed to a £500m reduction in total Bank of Mum and Dad first-time buyer gifts, falling from £7.5bn in 2023 to £6.9bn in 2024.
However, the number of first-time buyers increased by 12% in 2024 to 330,000.
Income Boost mortgages, which allow multiple applicants to borrow and combine their incomes to meet mortgage requirements, have seen significant growth.
Gen H reported a 102% year-on-year growth in Income Boost mortgage applications between 2023 and 2024.
Tembo’s analysis indicated that almost half (45%) of those boosting another’s mortgage still have a mortgage outstanding on their own property, with an average home value of £475,000 and an average outstanding mortgage of £123,000.
Over the past two years, the average value of homes owned by boosters decreased by 15% from £547,000 to £475,000.
Tembo’s data also showed that Income Boost mortgages enable first-time buyers to get on the property ladder three years sooner on average, with an average age of 31 years for first-time buyers using this type of mortgage.
The research also noted that five new Income Boost mortgage providers entered the market in 2024, bringing the total number of providers to 30.
Tembo expects between 30% to 40% growth in the number of Income Boost products arranged in 2025, with similar growth anticipated in 2026.
Richard Dana, CEO and founder of Tembo, said: “Family continues to be one of the most significant drivers for first-time buyers in the UK, but the form of support is changing.
“Cash gifts are still the biggest form of support, but for a growing number of families, Income Boosts are becoming more attractive.
“They don’t need to dig into savings and they can also support their children to get a step onto the property ladder without giving them an outright handout”
Pete Dockar, CCO of Gen H, said: “Affordability is the biggest hurdle for aspiring homeowners today.
“This means the Bank of Mum and Dad is having to adapt: it’s now the Bank of Family, and simply helping out with the deposit is no longer enough.
“Our job is to help borrowers do this safely, simply and sustainably.
Dockar added: “This is where the income booster comes in – it helps the Bank of Family lend an affordability boost to support loved ones onto the property ladder.
“Demand has only grown for this type of mortgage product, and we believe these measures will increase further in the years to come as more people learn about this powerful option.”
