Family gifts now drive UK property purchases, research reveals

Bank of Mum and Dad reshapes property market

Family financial support has become a defining structural feature of UK homeownership, according to new research from The Private Office (TPO), a chartered independent financial advice firm. A survey of 2,126 UK adults aged 45 and over, conducted in May 2026, reveals the extent to which younger generations now depend on parental and grandparental wealth to access the property market.

The findings are striking: 97% of respondents believe it is difficult or very difficult for young people to buy a home without family support, whilst 80% say homeownership is becoming increasingly dependent on family wealth. Property purchase has emerged as the single biggest reason people give financial gifts to relatives, cited by 51% of those who have already gifted money—ahead of general living costs (20%) and education (8%).

A further 88% of those surveyed say they would consider helping children or grandchildren buy a property, suggesting the trend is set to intensify. The research indicates a fundamental shift in attitudes towards intergenerational wealth transfer, with 81% believing parents and grandparents should help younger generations financially during their lifetime rather than waiting until death.

Scale of gifting far exceeds expectations

The actual sums being transferred are substantial. Among those who have already gifted, 22% have given over £100,000, and 58% have given more than £20,000. Only 12% gave under £5,000. Gifts vastly outweigh loans, with 82% of givers opting for outright gifts compared to just 12% who loaned the money.

Of the 14% who have not yet gifted, 40% plan to do so, with outright gifts before death remaining the preferred approach (59%) over inheritance via will (32%). This preference reflects broader attitudes: 71% say financial support should be given "early, when it can make the biggest impact," yet only 8% believe wealth should mainly be passed on after death.

However, current practice lags behind stated preference. Freedom of Information data obtained by TPO from HMRC shows that in 2022/23, people aged 85 and over accounted for nearly 60% of all estates that included lifetime gifts and the largest share of total value gifted, suggesting wealth transfers still occur much later in life than people say they would prefer.

Inheritance tax and gifting risks

Whilst most gifts remain tax-efficient—only around 15% of estates that included gifts paid inheritance tax in 2022/23, meaning most fell within tax-free allowances or were exempt—getting the structure wrong can prove costly. HMRC has collected an estimated £336m in inheritance tax over the past five years from failed gifting arrangements, where assets were deemed not to have been fully given away.

Retirement security remains the primary barrier to early gifting. Just 64% of those surveyed feel comfortable giving a large sum to younger family members during their lifetime. The biggest concern holding people back is fear of running out of money in later life, cited by 37% of respondents, followed by concerns about care home costs (16%).

Daniel Blandford, Partner at The Private Office, commented: "What this research makes clear is that the Bank of Mum and Dad has also become the Bank of Grandparents too. When almost all respondents say it's difficult for young people to buy without family support, that's no longer a peripheral concern, it's become a structural feature of the property market."

For investors assessing market dynamics and first-time buyer demand, these trends highlight the critical role of family capital in property transactions. Those seeking below-market opportunities or planning applications in areas with strong family wealth demographics may find useful insights in planning alert tools and deal finder resources.

Source: Property Industry Eye.