In the UK, it is. In the US, it isn't.
In the UK, they use plural conjugation with group nouns like "family," but in the US, group nouns take a singular conjugation. Because of that, a "family" isn't seen so much as a plurality of people in the US but more as an object, an object that can't be friends because it is an object and not a person, so you can't properly say, "Their family is friends of his" or even "Their family is a friend of his." In American English, those don't make sense. You could say, "He's a family friend," or, "He's a friend of their family."