Expecting to play Bank of Family this year? Here’s what you need to consider first

5 February 2026

Latest figures indicate that 30% of people buying their first home turn to the “Bank of Family” for financial assistance, seeking funds to raise a deposit not only from their parents, but also from other family members and even generous friends, the Independent reports.

And it’s not only first-time buyers who are receiving help from family or friends. Indeed, the same article reveals that 1 in 5 homebuyers moving to their second home are also seeking financial support from their close circle.

According to Savills, between 2020 and 2024, the Bank of Family spent more than £38 million helping relatives get on the property ladder – a substantial 71% increase compared to the previous four years.

With rising property prices and higher costs of living, if you’re thinking about acting as the Bank of Family to help your children buy their first home or start a new venture in the coming year, here are five areas to consider before handing over the money.

1. Check how much money they need and how they will use it

Before you offer support, check how much your child needs and how they intend to use the money.

The amount needed for a deposit may be higher than you expect. In October 2025, the Land Registry UK house price index showed that the average house price was £269,862.

Assuming a first-time buyer needs a 10% deposit, they would require almost £30,000. And that’s just for the deposit.

Buying a house comes with other costs that also need to be considered, including:

• Solicitor fees
• Survey costs
• Mortgage fees
• A budget to purchase furniture for their new home.

Having a conversation about how much your children have already saved and the amount they will need can help ensure you’re all starting on the same page.

When taking out a mortgage, always remember that your home may be repossessed if you do not keep up your mortgage repayments or other loans secured on it.

2. Decide if funds will be a gift or loan

While the Bank of Family is often associated with gifts, many families opt instead to lend the money to buy a property.

Before you commit one way or the other, review your finances and long-term plans to help you decide whether you’ll be more comfortable making a loan or a gift.

If you have capital available now but will need it later, such as to fund your retirement, it may be better to consider a loan.

Should you decide to loan the money, make sure you’re clear about your expectations and the terms:

• What repayment schedule will your child need to stick to?
• What will happen if they can’t meet the repayments?
• Will you charge interest?

Going through these details may feel a bit formal when you’re helping your child, but it can help you avoid misunderstandings. In some cases, you may wish to take legal advice and put a formal agreement in place.

3. Discuss how relationship breakups could affect your gift

If your child is buying a home with their partner, take time to consider what would happen if the relationship broke down.

While it’s a difficult topic to broach, it’s an important conversation to have before you make any financial promises.

According to a briefing from the House of Lords Library, prenuptial agreements are growing in popularity. Figures suggest that 21% of married people in the UK have a prenup in place. Meanwhile, a 2023 YouGov survey found that 42% of people viewed them as a “good idea”.

At present, prenuptial agreements are not enforceable by courts in England and Wales.

If this is a concern for you, an alternative option may be to loan the money, rather than gift it.

Another idea that you may wish to consider is to work with a solicitor to draw up a declaration of trust, which states the money was gifted to your child and not their partner.

If someone else will be living at the property, a cohabitation agreement or tenancy agreement may also be appropriate.

4. Consider if it will affect your long-term financial security

If you’re in the happy position of being able to offer support, your instinct may be to help without question. However, before getting ahead of yourself, take some time to consider how your gift could affect your own financial security.

Would taking a lump sum out of your assets now affect your lifestyle or long-term plans? Would you still have enough to cover unexpected costs later in life?

A meeting with a financial planner to discuss your plans to gift or loan a deposit can help you understand the implications, allowing you to offer support with confidence.

5. Review your estate plan

Providing a gift to a family member now may affect how you wish your estate to be distributed, so it’s wise to review your will and estate plan.

According to a report from IFA Magazine, nearly half of people in the UK believe it’s fair to leave unequal inheritances to children or grandchildren. While there are likely various reasons for this, it often relates to financial gifts made during their lifetime.

If you’ve gifted a house deposit to one child, you may want to leave a larger sum to your other children in your will.

Get in touch

If you’d like advice on any aspect of gifting or lending money to your children, or you want to be sure you can afford to make a gift, please get in touch.

Email [email protected] or call 0161 8080200.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate estate planning.