Second-steppers rely on Bank of Mum and Dad for larger property deposits, Barclays finds

Second steppers are increasingly turning to family for large deposits to move up the property ladder, according to new research from Barclays. The average cash gift for a second-time buyer to buy a next home is £81,451, compared with £76,239 for first-time buyers.

One in five second steppers have received financial help from family and friends to buy a bigger and better home. The Bank of Mum and Dad is funding growth in the housing ladder as prices and rents squeeze affordability for those seeking to upgrade from their first home. The most common form of support is lump-sum gifts from parents, followed by windfalls from inheritances and loans from family and friends. Barclays noted that nearly three in ten second or third-time homeowners who received financial help for their current property also had assistance for a previous property, suggesting the Bank of Mum and Dad may have spent more than £100,000 on some children’s property.

Prices for homes have risen, with the average price up 2.6% to £272,000 in the year to September, while rents have surged in many areas. That combination makes it harder for first-time buyers to save a 10% deposit without help from relatives. At the same time, those who already own homes face high monthly mortgage payments and stretched affordability as wage growth has lagged inflation. Mortgage costs have begun to ease somewhat as lenders compete in a rate-fix environment, but they remain a far cry from the lows seen five years ago.

Jatin Patel, a housing expert at Barclays, said: “Though first-time buyers are often thought of as the main beneficiaries of the Bank of Mum and Dad, the reliance of second-steppers on family support underlines the impact of cost-of-living pressures.” The bank’s data underscore how family-backed finance is shaping the housing ladder beyond those purchasing their first homes.

The shift into higher-priced properties among buyers who already own homes comes as mortgage rates have risen substantially over recent years, increasing the cost of remortgaging or purchasing. While rate competition has driven some relief in monthly payments, borrowing remains more expensive than in the recent past, reinforcing the role of parental help for families seeking a larger or more suitable home.

The data also highlight a broader trend of intergenerational support in housing markets. For second-steppers, upgrading often means taking on larger mortgage commitments or longer mortgage terms, with parental gifts helping to cover larger down payments or push the total purchase price higher. The research notes that the average gift to a second-time buyer exceeds the amount received by first-time buyers, a reflection of both rising property values and the continued importance of family finance in securing a move up the ladder.

Mortgage lenders continue to emphasize finding the best available rates and seeking professional advice, as borrowing costs, even when easing, remain a significant hurdle for households looking to upgrade. For buyers who can access Bank of Mum and Dad funds, the calculus can be different, enabling more up-front equity and potentially lower loan-to-value ratios. However, the reliance on family support is not universal, and many prospective buyers still face challenging affordability conditions in today’s housing market.

In sum, Barclays’ findings suggest that the so-called Bank of Mum and Dad remains a substantial, if evolving, force in the housing market. As prices stabilize somewhat and wage growth remains uneven, more second-stepping households appear to be turning to their families to bridge the gap to a larger or more suitable home. The trend underscores how affordability pressures continue to shape housing decisions across generations in a market characterized by high prices and fluctuating borrowing costs.