For many first-time buyers (FTBs), the most significant barrier to homeownership isn’t necessarily a lack of income, but it often revolves around the challenge of accumulating a sufficient deposit.
For these aspiring homeowners, the prospect of saving tens of thousands of pounds while managing rising everyday expenses can feel like an impossible task. Yet, despite this financial pressure, homeownership aspirations remain strong among this demographic.
One property type that holds strong appeal for such borrowers is new build homes. They offer attractive features such as move-in-ready modern living, energy efficiency, and are often available with builder incentives or a chain-free purchase process. However, without a sizable deposit, securing a mortgage on a new build home has become a significant challenge in recent times, especially since the closure of the Help to Buy scheme. This highlights how first-time buyers are relying on financial support more than ever.
The concept of borrowing or being gifted money from family members, notably the Bank of Mum and Dad, to purchase a home is nothing new, but a recent report from UK Finance shows that it is becoming more common and increasingly necessary. According to the data, first-time buyers who receive assistance are able to buy a home at an average age of just over 30, with an average household income of £56,000. In contrast, those purchasing without support tend to be older, over 32 years old, and have a higher household income, at £65,000. Despite this, assisted buyers are on average purchasing higher-priced properties, thanks to larger deposits facilitated by family support.
This divide is seen across the UK, but the difference in deposit amounts is most pronounced in London. In 2024, a first-time buyer purchasing without support typically put down a deposit of nearly £150,000. However, for those receiving family assistance, the average deposit was just under £225,000.
This data highlights the growing importance of family-backed solutions in a market where affordability challenges remain. Thankfully, options are available, and one innovative solution to this problem involves using a collateral charge on a parent’s or grandparent’s property. This approach enables buyers to secure up to 100% of the purchase price without relying on a traditional cash deposit.
In January 2024, we rebranded our Family Assist first-time buyer product to Deposit Lite. This change was made to better capture the product’s benefits and recognise that traditional paths to homeownership are not always feasible for everyone.
Looking at this product in action, we recently had a case where a young couple in their early twenties were able to use this facility to purchase a new build home. Despite solid incomes, they struggled to save due to high rental costs. Their parents, while lacking liquid cash, leveraged home equity to support the purchase through a collateral charge. This allowed the couple to secure a 100% mortgage with a 35-year term. The builder’s incentives were accepted without issue, and the manual underwriting approach meant we were able to take a holistic view of their financial situation. Their offer remained valid throughout the build process, giving them valuable breathing room.
In another scenario, a solo buyer working in sales, recently debt-free but with a credit score which hadn’t quite recovered from a recent credit blip and a deposit shortfall, sought a city centre apartment. Through supportive grandparents who had substantial equity in their home, Deposit Lite and our underwriting team ensured their unique financial situation was considered to facilitate the case.
Rather than being filtered by rigid algorithms or standardised credit scoring models, applicants are evaluated based on their full financial profile. This is especially beneficial for those with thin credit files, recent debt clearance, or complex circumstances.
These are just two examples of how this product works in practice. As housing costs continue to rise and traditional government support declines, alternative solutions like collateral charge-backed purchases are becoming increasingly important. Products like Deposit Lite, which leverage family support without requiring direct cash transfers, offer a practical solution for first-time buyers, especially when it comes to new builds.
For brokers, this represents an opportunity to help more clients. For families, it’s a chance to offer support without the need to part with savings or refinance their own homes. In a challenging market, solutions that blend flexibility with family assistance can be the key to unlocking homeownership for the next generation.
Claire Askham is head of mortgage sales at Buckinghamshire Building Society
