Skyrocketing Number of Homebuyers Receiving £100k or More as Gifts for Deposits - Families Employ Strategies to Evade Inheritance Tax
Cash-rich baby boomers are fueling an extraordinary wealth transfer to younger generations, with hefty home deposits being the preferred conveyance. In the first quarter of 2025 alone, a staggering 30,788 deposits worth £100,000 or more were showered upon budding property purchasers, according to data from Twenty7tec.
It's no secret that the offspring of the boomer generation are finding it increasingly difficult to navigate the current housing market. The report reveals that a staggering 29% of buyers assisted by family gifts last year received a whopping £100,000 or more. As property prices continue to escalate, help from the Bank of Mum and Dad seems necessary for those awaiting a slice of the real estate pie.
The trend is particularly evident among high-end property buyers. For instance, in 2024, half of the buyers who splurged on homes between £300,000 and £400,000 received a £100,000+ gift, whereas the figure for those purchasing properties worth £1 million or more climbed to a staggering 99%.
This year has seen a surge in the number of £100,000 gifts for certain price bands, according to Twenty7tec. Buyers paying between £400,000 and £500,000 and £900,000 to £1 million stand out, with a larger number of buyers receiving bigger deposits from family compared to 2024.
Jo Eccles, founder and managing director of prime central London buying agency, Eccord, remarks that the Bank of Mum and Dad has become a dominant force driving the London market, accounting for at least one-third of property transactions under £5 million. Eccles adds that she's seen more parents buying properties outright for their children and grandchildren.
Mark Harris, chief executive of mortgage broker SPF Private Clients, notes that families are gifting more due to rising house prices and rents that make it difficult for first-time buyers to save enough for a deposit. It seems that baby boomers recognize the struggle and are eager to help their offspring secure a foothold in the property market.
However, such generosity carries a strategic aspect, as well. With inheritance tax thresholds frozen until at least 2030, and inheritance tax receipts reaching £8.2 billion in April 2024 to March 2025 (an increase of £0.8 billion compared to the previous year), parents and grandparents see gifting as a smart inheritance tax strategy.
Buying agent Jo Eccles also points out that the shift in pension taxation and growing social acceptability of pre-nups and cohabitation agreements contribute to the rise in large property deposits gifts. With pensions soon to lose their tax-exempt status, and the taper for the residence nil rate band kicking in for estates over £2 million, gifting substantial sums toward housing seems an attractive proposition for many aging baby boomers.
Rob Houghton, founder, and CEO of reallymoving, the comparison site for home movers, adroitly summarizes the situation: "When considering whether or not to gift money for a deposit, for those with wealth to pass down, it's now a question of why wait?" With rising property prices and the eventual loss of pension tax exemptions, gifting a deposit can be a win-win for both the giver and the recipient. So, it seems the bank of Mum and Dad is indeed on overdrive!
Mortgage deposits worth £100,000 or more are becoming increasingly common, with a noticeable surge in 2025 according to data from Twenty7tec. This trend is particularly notable among high-end property buyers, as half of those purchasing homes between £300,000 and £400,000 received a £100,000+ gift in 2024.
Pensions soon losing their tax-exempt status and the taper for the residence nil rate band kicking in for estates over £2 million are making gifting substantial sums towards housing an attractive proposition for aging baby boomers. With inheritance tax receipts reaching £8.2 billion in April 2024 to March 2025, many parents and grandparents see gifting as a smart inheritance tax strategy.
Jo Eccles, founder and managing director of prime central London buying agency, Eccord, has mentioned that the Bank of Mum and Dad has become a dominant force driving the London market, accounting for at least one-third of property transactions under £5 million. Eccles also points out that the shift in pension taxation and growing social acceptability of pre-nups and cohabitation agreements contribute to the rise in large property deposits gifts.
Mark Harris, chief executive of mortgage broker SPF Private Clients, notes that families are gifting more due to rising house prices and rents that make it difficult for first-time buyers to save enough for a deposit. It seems that baby boomers recognize the struggle and are eager to help their offspring secure a foothold in the property market.
This strategic aspect is not lost on the recipients of such gifts, as Rob Houghton, founder, and CEO of reallymoving, points out: "When considering whether or not to gift money for a deposit, for those with wealth to pass down, it's now a question of why wait?" With rising property prices and the eventual loss of pension tax exemptions, gifting a deposit can be a win-win for both the giver and the recipient.
In the realm of personal-finance and real-estate, the practice of gifted deposits is becoming a notable feature, especially when it comes to mortgages and property transactions, as more and more baby boomers are choosing to support their children and grandchildren in this way.
