Parents are playing an increasing role in helping their children get onto the property ladder as research reveals that, from 2018 to 2020, the value of financial gifts reached a record £29bn.
A decade earlier, between 2008 and 2010, just over £13bn was gifted.
More than half of those receiving a gift between 2018 and 2020 were in their 20s or 30s.
As a result, over one in three recent first-time buyers say they received help from friends or family to get onto the property ladder.
Increasing reliance on parents
The Intergenerational Audit 2024 from the Resolution Foundation and CPC-Connecting Generations examined how the support that families give and receive throughout adulthood has changed over recent decades, and what this means for people’s economic prospects.
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The research revealed that young adults were increasingly reliant on their parents for housing support.
Since the turn of the century, the number of people aged 18-34 who still lived with their parents had risen from one in four (26%) to nearly two in five (39%) in 2021-22.
The financial benefits from not moving out, revealed by the report, were stark.
If all ‘boomerang children’ today were to move to the private rented sector (PRS), their rental costs would add up to a total of £3bn per month.
Value of inheritance rockets
The report also found that inheritances – which have more than doubled over the past decade from £83bn in 2008-10 to £189bn in 2018-20 – are being used by people to pay off their mortgage or retire early.
People who received an inheritance of £50,000 or more were four percentage points more likely to retire early when compared with those that did not receive an inheritance.
While most family transfers flow down the generations from old to young, a key upward transfer – caring for adults and elderly relatives – has also grown over time. Carers UK estimates that unpaid care provision is currently worth £162bn per year.
Molly Broome, economist at Resolution Foundation, said: “As Britain gets older and wealthier, transfers between generations are playing a greater role in shaping people’s economic prospects.
“Families today play a bigger role in helping young people onto the housing ladder, helping older workers off the jobs ladder and into retirement, and supporting relatives when they’re ill.
“These family transfers are hugely important and can be very rewarding. But they are not shared equally across society. Those who aren’t lucky enough to have wealthy parents often struggle to secure a home of their own or enjoy early retirement.”
