The Bank of Mum and Dad has too much influence on homeownership in Britain – that needs to change

“Homeownership is now a hereditary privilege,” this was the damning conclusion of Financial Times journalist John Burn-Murdoch in 2023. Our housing market isn’t only dysfunctional, it is ever more reliant on the Bank of Mum and Dad. Since the 2010s, parents have been a top 10 mortgage lender in the UK. We may shy away from it, but we are living in an inheritance economy, where access to housing (as well as the other big-ticket items in life) is increasingly tied to whether you are able to draw from the parental ATM. 

We can all recite the common complaints about spiralling cost of rents and a lack of affordable house building in this country, but it is worth noting quite how much parental wealth has become intertwined with the UK housing story. Firstly, homeownership and housing wealth is concentrated in the older generation.  

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Baby Boomers, as we know, came of age under Thatcher’s property revolution, the beneficiaries of a set of conditions that today seem fantastical. When my mother bought her first home in Tooting – a five bedroom property for under £30,000 – admittedly a wreck with no ceilings or bathrooms, one of the reasons she took the plunge was that at the time local councils were giving out grants for new owners to renovate inhospitable dwellings.  

In the 1980s, the average purchase price was £47,488, with an average deposit of £2,955, and the average length of time saving up for this was just three years and one month. 

Fast forward to the 2020s, and a recent report found that 65% of new homeowners would have struggled to buy without parental support. And this is not just a London issue nor a recent phenomenon. Back in 2016, 30% of first-time buyers in Wales and the North West required parental assistance to get on the property ladder.  

Parents have become the gatekeepers of the traditional markers of adulthood especially homeownership. Parental support currently enables buyers to enter the market an average of 2.6 years earlier than those without such help, with the gap being even wider in London. 

If Thatcher’s revolution made homeownership more accessible for the young and aspirational of the 1980s, then the reverse has happened for millennials and Gen Z over the last 20 years. But that is only half of the story. In the aftermath of the financial crisis and at a time when the housing market became dysfunctional and the state was being cut back, the broader family, especially mum and dad, have been stepping up and dishing out to help their offspring.  

The post-2008 economy with low interest rates, cheap money, stagnant wages and quantitative easing may have favoured asset-owning parents, but many have been passing on that advantage, through the gifting of deposits, rent-free accommodation and housing support for their kids. Forget the old trope of Boomers versus millennials, the real divide is within young people, between those with parental support able to step on the housing ladder and those without who are closed out. 

But help for first time buyers is only one aspect, the impact of parental wealth has long been felt in the rental market too. In 2016, the Post Office reported that around 730,000 parents were renting out second properties to their children, often at below-market rates. More recently, parents have been stumping up to help their offspring with deposits, as well as the now decade-long trend of allowing their adult children to live in the family home longer. Once mocked as boomerang children, today it is seen as a legitimate and preferred alternative to paying exorbitant rents.  

The Bank of Mum and Dad has many supportive products on offer when it comes to housing, from acting as rent guarantors to directly covering mortgage repayments, from deposits to equity release. All this however often comes at great personal cost to parents. Many endure financial strain or sacrifice their own long-term financial security to support their children’s homeownership dreams. We wrongly assume parents can afford to be this generous. 

The extent to which we are all implicated in an economy driven by parental wealth and generosity is a taboo subject that we are all embarrassed talking about either within our friendship groups, in our families or within society at large. In the exclusive YouGov polling we commissioned for my book, 69% of Britons agreed that we are too reliant on parental wealth for getting people on the housing ladder.  

We all know it and yet there have been few political incentives to deal with it. Shamefully little was done by the Conservative government to address the on-going issues of housing, so hitched electorally were they to asset-heavy older voters.  

But in truth, the hereditary dynamic extends well beyond these shores. Inheritocracy is a global phenomenon – in the US, 43% of homebuyers under 35 receive help from their parents, while in Australia, 40% of 25- to 34-year-olds expect familial assistance. In China, where 70% of millennials own homes, at least 40% have achieved this with family financial support. 

The issue is complex, but we risk oversimplifying and potentially misunderstanding it by leaning on the repeated politician’s pledge to just build more houses. The reality is that the housing challenge is deeply linked to the property wealth of Baby Boomers and their financial support for their children, creating a system in which we are all entangled, whether we benefit from it or not. 

Inheritocracy: It’s Time to Talk About the Bank of Mum & Dadby Eliza Filby is out now (Biteback, £20). You can buy it from The Big Issue shop on Bookshop.org, which helps to support The Big Issue and independent bookshops.

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