Bank of Mum and Dad homeowners feel ‘pressured to live near parents’

First-time buyers who benefitted from the Bank of Mum and Dad are staying closer to home to appease their parents, and in some cases falling out with friends, due to the help they have received, according to the latest Compare the Market research.

Nearly two-thirds (62%) of homeowners under the age of 35 who bought their first property with the help of Bank of Mum and Dad said they felt pressure to stay geographically close to their parents because of the help they received. A similarly large 67% said they also feel less able to push back against their parents in disagreements because of the help they received.

More than a fifth (22%) said their parents visit them more often as a direct result of the financial help they gave them, while a smaller proportion (17%) said their parents had a say in which home they chose and continue to have a say on any significant home improvements.

Despite the strings attached, three-quarters (75%) of homeowners said they worry about how the financial support they received could affect their parents’ retirement security. More than two-thirds (69%) of homeowners said they felt grateful for the help they received from parents when buying their first property, and more than half (52%) said they felt lucky. A minority said they felt guilty (16%), secretive (8%) and indebted (17%).

But asked whether they have ever felt the need to conceal how much their parents helped with their house purchase for fear of being judged, a resounding 64% said they often or sometimes feel the need to do this.

Nearly half (46%) of Bank of Mum and Dad homeowners said receiving financial support from their parents had affected their relationships with their friends, with nearly a third (31%) saying they had fallen out with a friend over it.

Nearly a fifth (18%) of respondents said they received between £10,000 and £20,000 from Britain’s secret mortgage lender. More than one in ten (13%) said they received between £20,000 and £30,000, and another one in ten (10%) said they had received between £50,000 and £60,000.

Nearly a third of homeowners (30%) still rely on Bank of Mum and Dad. The help doesn’t stop at respondents’ current homes. More than a third (38%) of Bank of Mum and Dad beneficiaries said they plan to use financial support from their parents to buy their next home, in addition to their current one.

Most of the money homeowners received was cash for a deposit (43%), followed by cash for legal and mortgage arrangement fees or building work (39%) and furniture (38%).

Nearly a third (32%) used their parents as guarantors, and nearly a quarter (24%) said they received a loan for a deposit, meaning their parents expected them to pay back what they received.

Close to a third (30%) of those who received help from parents to buy their first home continue to receive financial help in order to fund the upkeep of their homes. The most popular reason for ongoing financial help is maintenance (30%), followed by renovations (27%) and mortgage repayments (26%).

After moving into their home, respondents said they received an additional £2,204 on average from their parents to fund further ongoing costs.

Aside from ongoing family help, more than a quarter of respondents said they rely on credit cards (27%) for living costs, and just under a quarter (23%) have taken out a personal loan. The vast majority (72%) fund all ongoing costs from their regular income and savings.

Sajni Shah, Money Expert at Compare the Market, said “For many first-time buyers, help from the Bank of Mum and Dad can be the difference between getting on the property ladder or missing out altogether – but these findings show that the support often comes with emotional and practical trade-offs.

“What’s striking is that financial help doesn’t always mean financial security. More than a quarter of respondents still relied on credit cards for everyday living costs, and many took out personal loans on top of their mortgage.”