The amount parents and family members are contributing to home buyers has hit a record high of £9.2bn this year, up by 14% compared to £8.1bn last year.
The latest Bank of Family report by Legal & General and the Centre for Economics and Business Research estimates that the figure is set to grow further, with parents and grandparents on track to provide £11.3bn a year towards home buyers’ purchases by 2026.
Many of those giving money are doing so at a cost to their own stability, with 49% reporting that they feel less financially secure after doing so.
Funding from the Bank of Family is used to help pay for 42% of all homes purchased by buyers under 55.
The majority of recent or prospective recipients of this money say they would have to delay their home purchase without financial help.
Of the 335,000 property purchases supported by the Bank of Family each year, 204,000 are funded with assistance from parents, 42,000 are with funds from grandparent and 88,900 from other family members or friends.
While 48% say they use cash savings to help their loved ones, 40% use ISA savings and investments and 12% are tapping into pension savings.
Almost one in five families use their own property wealth (19%), either through downsizing (12%), equity release (8%), remortgaging (4%) or a combination of these.
More than a third (35%) of relatives have welcomed adult family members to live with them rent-free to help them save towards a purchase.
L&G retail chief executive Bernie Hickman says: “This research shows that families across the generations are facing tough decisions as they try to balance the aspirations of today, with the needs of tomorrow.
“We need to look at what could help all generations achieve better financial security, enabling them to build savings and assets today, and sustain their financial adequacy through their later years too.
“Almost a quarter of families are using property wealth to help younger generations onto the property ladder, but this option isn’t available for everyone.
“When people are making difficult and complex choices like these, understanding all the options, and what the long-term impact of choices might be, is really vital.”
