Our research shows that in addition to the 1.0-1.2 million homes that have typically been sold in England & Wales each year, an extra 8-25% change hands at least partly on the back of family philanthropy.
In the five years leading up to 2019, an average of 130,000 homes (or shares of homes) changed ownership annually without any money changing hands. This figure is equivalent to around 13% of the sales which took place across England & Wales.
Home gifting typically takes one of two forms. The larger portion, approximately 61% in 2024, involves gifting a share in a property. These are usually intra-generational transactions, such as a homeowner gifting a share of their primary residence to a non-homeowning partner.
The remaining 39% involves gifting of an entire property. Typically these are inter-generational transfers, for example, parents or grandparents gifting a property to their children or grandchildren.
Gifted transactions are mostly driven by necessity rather than desire. Typically this is driven by helping a partner or child into homeownership, often while also managing the process in a manner which is generally very tax-efficient.
For the most part, this means numbers have been fairly stable. As a result, gifted transactions account for a larger share of homes changing hands in years when the market is slower.
That said in more recent times, there has been an increase in the number of homes gifted. In 2023, approximately 152,000 gifted transactions were recorded, well above the recent pre-COVID average. And based on projections of 1.1 million sales in 2024, we anticipate the number of gifted properties exceeding 220,000 this year.
Gifted property will probably continue to account for a higher share of all homes that change hands. There are precious few signs that younger generations will need less help to buy any time soon. Older generations with the means to do so will continue to support their children in advance of a potential inheritance.
Alongside this, an increase in tax rates, particularly in areas such as stamp duty, capital gains, or inheritance tax, is likely to drive up the number of homes gifted in the medium term. In many cases gifting a property will be more tax efficient than selling it to generate cash which can be passed on.
Gifted homes are likely to form an increasingly important backdrop to the path of future homeownership rates. For young adults in particular, the ability of their parents to support them financially in their 20s and 30s is increasingly a defining factor as to whether they become homeowners.
While a contribution towards a deposit has become commonplace over the last decade among those with the means to do so, the distinction for both stamp duty and general tax purposes between someone buying a first or a second property has also made spreading home ownership more evenly across the family, progressively more tax-efficient.
