How to help your child buy their first home

For many young people in the UK, buying a first home can feel further out of reach than ever. With rising property prices, larger deposit requirements and the increasing cost of living, saving enough to get onto the property ladder can be a significant challenge. As a result, more parents are stepping in to support their children with their first purchase. Whether it’s contributing towards a deposit, helping with affordability, or guiding them through the process, parental support can make a real difference. If you’re considering helping your child buy their first home, here are several ways you may be able to support them while protecting your own financial position.

Gift Part (or All) of the Deposit
One of the most common ways parents help in the UK property market is by contributing towards their child’s deposit. Many first-time buyers can afford monthly mortgage payments but struggle to save enough upfront, particularly while paying rent. Even a modest contribution can help your child meet minimum deposit requirements and may allow them to access better mortgage rates. If you decide to gift money towards a deposit:

• Most mortgage lenders expect the money to be an unconditional gift rather than a loan.
• You will usually need to sign a gifted deposit declaration confirming the funds do not need to be repaid.
• Lenders or solicitors may request identification and proof of where the money originated.
• You may also need to confirm you will not have a legal interest in the property.

Consider a Family-Assisted or Guarantor Mortgage
If your child’s income alone does not meet a lender’s affordability criteria, there are mortgage products designed to allow family members to help. These can include:

• Guarantor mortgages, where you agree to cover repayments if your child cannot.
• Joint borrower, sole proprietor mortgages, where you help with affordability but your child remains the sole owner.
• Savings-backed mortgages, where a portion of your savings is held as security.

These options can help buyers access larger loans, but they also carry risks. If repayments are missed, your finances or credit profile could be affected, so it is important to take independent advice before proceeding.

Help Them Budget for the True Cost of Buying
The deposit is only one part of the cost of purchasing a property. First-time buyers often underestimate the additional expenses involved in the buying process. These may include:

• Solicitor or conveyancing fees
• Mortgage arrangement fees
• Survey costs
• Removal costs
• Buildings and contents insurance
• Initial repairs, furnishings and moving expenses

Encourage Realistic Affordability
Buying a home is exciting, but it is also a long-term financial commitment. One of the most valuable ways parents can help is by encouraging their children to focus on what they can comfortably afford rather than the maximum they can borrow. Consider discussing questions such as:

• Could they still manage payments if interest rates rise?
• Do they have savings left after completing the purchase?
• Will their monthly costs still allow for a comfortable lifestyle?
• Is the location suitable for work, commuting and future plans?

Understand the Tax and Legal Considerations
If you are gifting a significant amount of money, it is worth being aware of potential tax considerations. A gifted deposit may be treated as a potentially exempt transfer for inheritance tax purposes. This means tax could become relevant if the donor passes away within seven years of making the gift, depending on the value of the estate. Taking advice from a solicitor or financial adviser can help ensure everything is structured correctly and recorded properly.

Our Final Thoughts
Helping your child buy their first home can be one of the most meaningful ways to support their future. Whether you contribute financially, assist with affordability, or simply guide them through the process, your involvement can help them take a significant step onto the property ladder. The most important thing is to approach the decision with open conversations, clear expectations and a good understanding of the financial implications for everyone involved.