The Bank of Gran and Grandad

by Housesimple on 12th April 2017

It’s no secret that first-time buyers need a much bigger deposit now than they did ten years ago. In fact, the average deposit they’re putting down has more than doubled in that time. However, it seems like 2016 saw the largest number of first-time buyers step onto the property ladder in over a decade.

Family support

This surge in buyers has a source: the 'bank of mum and dad'. According to a Social Mobility Commission report, the number of people turning to their parents to help them buy property has jumped by 20% in the last seven years. This study also predicts that by 2029 this will have doubled, so around 40% of buyers will rely on mum and dad to help them access the market.


But, those getting involved with the property ladder aren't getting any younger. The average age of first-time buyers in the UK is now 30 years old, although it does vary a bit by area. Not only that, but many people aren't just relying on parents anymore: they're also skipping a generation and getting a helping hand from gran and grandad too.

Counting the cost

Now more than ever before, grandparents are stepping in to help their families out. This could mean getting involved with childcare for the younger members of the family – which occupies around seven million retirees and saves about £8 billion in childcare costs – or it could mean chipping in financially.

While offering time to give the family a helping hand might be a no-brainer, particularly for those grandparents who love spending time with the little ones, covering the cost of a house deposit is another matter. 


Last year one study suggested that retired over-55s had withdrawn a total of £17 billion in loans against their own homes. Although much of the equity withdrawn by over-55s has been to cover their own retirement costs, one in five retired homeowners now say they have released equity from their homes in order to help out their family.


This is surely another sign of the changing times, and the state of the property market too. Gran and grandad are likely to have benefited from much lower house prices and a lower cost of living for many years, which means they're frequently happy to pass on some of their security to the younger generations. And as one of the biggest investments you can make, this little bit of financial security is usually best used as a deposit for a mortgage on a good bit of real estate.

Finding a balance

In February 2017, living standards think tank The Resolution Foundation reported that pensioner incomes outstrip those of working families. This is good news for your gran and grandad, but it doesn't mean we should all be relying on the older generation for our daily bread and butter. Before accepting a financial gift from the older members of your family to go towards buying a house, it's always best to double check that their finances are in a stable situation, so that they won't fall into any troubles once the cheque has cleared. 


If everything's happily in the green, you might need to throw your family a big party (or two) in your new property to thank them for their helping hand.

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