Bank of Granny and Grandad open for business as more home buyers rely on older generation for help

  • Significant number (32%) of 18-34 year olds had financial help from grandparents to get on the property ladder¹

  • Nearly one-in-four prospective buyers expect help from their grandparents¹³. 

  • Trussle’s research identifies growing trend of assistance with just 3% of over 55s previously receiving help from relatives to buy a home² 

London, 23rd October: Nearly a third (32%) of homeowners, aged between 18 and 34, were given financial help by their grandparents to buy a property1 – compared to just 3% of over-55s² who previously had the same assistance - according to new research by online mortgage broker, Trussle

The scale of the growing ‘Bank of Granny & Grandad’ could be explained by rapidly growing house price to income ratios. In 1999, average house prices stood at £80,443 - just 4.5 times the average annual salary of £17,803. Today, average house prices are £234,853 - 7.9 times the average annual salary of £29,558³. Yet today, most mortgage lenders will lend applicants four to five times their household income. 

Trussle’s study looks at 2,000 current and aspiring homeowners across the UK. Overall, 12% of existing homeowners received financial assistance from their grandparents⁴. London leads the way with over a quarter (26%) of homeowners being helped⁵, compared to just 4% of those in Scotland⁶, which is at the bottom of the list. This is perhaps unsurprising, considering the average house price in London currently stands at £473,000 – three times Scotland’s average of £155,000⁷. 

According to the research, homeowners were typically 25 years old when they received financial support from their grandparents⁸. The amount of financial help received is, on average, over £7,400⁹. Using official house price data, this equates to 30% of a typical 10% deposit worth £23,485¹⁰. When asked why they received assistance, the majority (63%) said they would either not be able to afford the deposit without help or that their grandparents simply had access to spare money¹¹.  

However, those who didn’t receive help from the ‘Bank of Granny & Grandad’ but did get financial support from friends or other family members admitted they were likely to get more money, with the average amount being just over £16,000¹². 

Looking at prospective homeowners, the ‘Bank of Granny & Grandad’ looks set to continue supporting first-time buyers, and even grow. Nearly a quarter (23%) of would-be buyers are expecting a financial handout from their grandparents¹³. This compares to just 12% of existing homeowners who’ve had assistance⁴. 

Prospective homeowners expect to wait until they’re 34 years old before their grandparents help them get on the ladder¹⁴. On average, this group expects to receive £5,200 worth of support¹⁵.

When it comes to repayments, 23% of prospective homeowners expecting financial assistance don’t expect to ever reimburse their grandparents¹⁶. This is compared to 28% of homeowners who’ve already received the help and don’t expect to ever repay it¹⁷.

Dilpreet Bhagrath, Mortgage Expert at Trussle said: “Saving for a house deposit can be extremely difficult given that the average house price is now nearly eight times income³. This can be even harder for those who are renting at the same time – so financial support from family members is often essential to get on the property ladder. 

The research underlines the generosity being shown by grandparents across the UK as they help the younger generation get onto the property ladder.

But, clearly not everyone can rely on financial help from family and friends. There are a range of affordable schemes to help first-time buyers, such as the Help To Buy Equity Loan and Shared Ownership. However, more must be done to improve access to the housing market and this is where both Government and the industry needs to step up and consider innovative new approaches.

At Trussle we’re using our data to help design products that will enable more people to get on the property ladder and make mortgages more accessible.”   

– ENDS –

Notes to editors

For further information, please contact:

Katie Halfhead at Trussle: [email protected] / 020 3884 0368

Rupert Bhatia or Jess Riley at Teamspirit for Trussle: [email protected] / 020 7861 3827

We’ve taken extra care to ensure the information provided within this release is presented in a way that’s compliant with regulatory requirements. If you have any questions about how to repurpose this information or require any further assistance, please contact Katie Halfhead at Trussle.

Methodology

Trussle commissioned a nationally representative UK survey with research agency, Censuswide in October 2019.

1. Calculation: 188 homeowner respondents were aged between 18 and 34When asked, ``Did you receive financial assistance from any of your grandparents to buy your home?’ - 61 responded ‘Yes’61 = 32% of 188

2. Calculation: 432 homeowner respondents were aged over 55When asked, ``Did you receive financial assistance from any of your grandparents to buy your home?’ - 13 responded ‘Yes’13 = 3% of 432

3. Source: House price data: http://landregistry.data.gov.uk/app/ukhpi/browse?from=1999-08-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2019-10-01

1999 salary data: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2016provisionalresults (Figure 3, downloadable XLS data)

Latest salary data https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2018

Calculation:

£80,443 / £17,803 = 4.5 times£234,853 / £29,588 = 7.9 times

4. Calculation: 1000 homeowner respondents were asked ``Did you receive financial assistance from any of your grandparents to buy your home?’ - 123 responded ‘Yes’123 = 12% of 1000

5. Calculation: 93 homeowner respondents live in Greater London

Of these 24 responded ‘Yes’ when asked, ‘Did you receive financial assistance from any of your grandparents to buy your home?’

24 = 26% of 93

6. Calculation: 89 homeowner respondents live in Scotland

Of these 4 responded ‘Yes’ when asked, ‘Did you receive financial assistance from any of your grandparents to buy your home?’

4 = 4% of 89

7. Source: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/august2019 Section 4 & Section 5

8. 123 homeowner respondents answered a mean average of 25.15 when asked: ‘How old were you when you received financial assistance from your grandparents to buy your home’

9. 123 homeowner respondents answered a mean average of £7,437 when asked: ‘Approximately how much financial assistance did you receive from your grandparents to buy your home’ 

10. Calculation: 

Current average UK home worth £234,853. Source: http://landregistry.data.gov.uk/app/ukhpi/browse?from=1999-08-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2019-10-01

Typical 10% deposit of £234,853 = £23,485

£7,437 = 31% of £23,500. 

11. Calculation:123 homeowner respondents were asked ``What is the main reason you received help from your grandparents (tick one)

42 ticked ‘My grandparents have/had spare money

36 ticked ‘I couldn’t afford the deposit without them’

78 / 123 respondents = 63%

12. 153 homeowner respondents who did not receive financial assistance from their grandparents to buy their home, but received financial assistance from another family member of friend gave a mean response of £16,116 when asked: ‘Approximately how much financial assistance did you receive from them’

13. Calculation: 234 prospective homeowner respondents answered yes to ‘When it comes to buying a home in the future, do you expect to receive help from any of your grandparents?’

234 = 23% of 1000

14. 234 prospective homeowner respondents answered a mean average of 34.2 when asked: ‘How old do you expect to be when you buy a home with your grandparents help?’ 

15. 234 prospective homeowner respondents answered a mean average of £5,228 when asked: ‘How much financial help do you expect to receive from your grandparents?’

16. Of the 234 prospective homeowner respondents who expect to receive financial help from their grandparents when buying a home in the future, 54 stated, ‘I don’t expect to ever pay back the financial assistance.’

54 = 23% of 234

17. Of the 123 homeowner respondents who have received financial help from their grandparents when they bought a home, 35 stated, ‘I don’t expect to ever pay back the financial assistance.’

35 = 28% of 123

About Trussle

Trussle helps people love their journey of owning a home. We’re your free online mortgage broker, helping you wherever you are on the ladder.

See how much you could borrow or save in minutes. Whether you're looking at homes for the first time, or you're looking to remortgage for the fourth time. Our quick online calculators will help you take the next step on your home ownership journey.

Say goodbye to paperwork, long phone calls, and being left out of the loop. Say hello to a quick, jargon-free, personal service that you can access from anywhere at any time. We’ll help you find and secure your mortgage entirely online.

Relax while we ensure you're always on the right deal. We compare your mortgage with the latest deals on the market every day, and we’ll alert you the moment it's time to switch to a more suitable deal. That way, you'll never pay more than you should to own your home.

Did we mention that our service is completely free? Join Trussle to see where your home ownership journey could take you.

In September 2016 Trussle launched an industry-first partnership with online property portal Zoopla, making it possible to find and buy a home in one seamless experience. Trussle is backed by some of Europe's leading technology investors including Orange Growth Capital, LocalGlobe, Ed Wray (founder of Betfair), Ian Hogarth (founder of Songkick), Seedcamp, and Zoopla Property Group.

Trussle is a trading style of Trussle Lab Ltd, which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

Your home may be repossessed if you do not keep up repayments on your mortgage.

More information can be found at https://trussle.com/

Trussle’s press pack is available here

Learn more about Trussle

What people are saying about Trussle...