The equity release adviser said this figure represented almost two thirds of the average first-time buyer deposit but thinks the sum will have gone further in recent times thanks to the stamp duty holiday.

The research illustrates the extent to which younger buyers are being supported by their families in their bid to become homeowners or move up to the next rung of the ladder.

But it also demonstrates how helping younger family members was a major motivation for equity release customers with £755 million of the £3.4 billion in property wealth released last year used for gifting, according to Key’s findings.

It said the stamp duty holiday on all purchases up to £500,000 was a major driver with 43% of these gifts used for housing deposits and 26% for an early inheritance – some of which was possibly used for other types of property costs.

Will Hale, CEO at Key, said: “Finding almost £60,000 to use as a deposit for your first home is tough – especially in the current economic environment – and therefore it’s not surprising that many younger people have looked to take advantage of the stamp duty holiday.

“In 2020, older homeowners released almost £755 million of equity in order to help younger members of their family meet a range of costs including supporting them with an average of £42,500 to use for a house deposit.

“For many people, these gifts will have been the enabler to them buying their first home and is a perfect example of how intergenerational wealth transfer can deliver positive societal benefits.

“The stamp duty holiday has certainly been a catalyst for more activity in this area but helping family is always a major motivation for older homeowners exploring their equity release options.

”That said, it is vitally important that homeowners get specialist advice if they do decide to use some of the value tied up in their home to help their families.

“Balancing generosity with their own financial security is vital and a good adviser will help them explore all their options.”

Regional breakdowns

Key’s research also drilled down into how the figures differed across the regions of the UK. It found older homeowners in London (£102,826), South East (£61,500) and Wales (£44,200) were the most generous while those in the North West (£23,467) and Yorkshire (£25,217) were less so.

Despite this, modest house prices in these regions meant that first-time buyers still benefitted from 76% of the average deposit needed in Yorkshire (£33,313) and 67% of the average deposit required in the North West (£34,347).

Key identified four areas – Wales, the East Midlands, Northern Ireland and the North East – where the average gift from property wealth was higher than the average needed by a first-time buyer.

This suggested, said the equity release adviser, that in these regions some people who relied on family funding were able to put down a larger deposit, purchased a more expensive property or undertake renovations.

Gifts for house deposits were highest in London at £102,826 and lowest in the North West at £23,467.

However in Wales the average gift at £44,208 was the biggest in comparison with the average first-time buyer deposit with Northern Ireland at £34,167 the second highest proportionally. Gifts in the North East and the East Midlands also exceeded the average first-time buyer deposit.

Source: Key