A quarter of property sales funded by the Bank of Mum and Dad
‘The Bank Of Mum And Dad’ will help to buy homes worth over £75bn in 2017, according to Legal and General – funding over one in four property transactions in the UK.
It will lend over £6.5bn this year, said the financial giant, up from £5bn in 2016, providing deposits for over 298,000 mortgages.
This puts the Bank of Mum and Dad on a par with the 9th largest mortgage lender in the UK, Yorkshire Buiing Society.
How the other half lives
In 2016, a third of prospective homeowners received financial help to buy from friends and family – in 2017 that figure jumps to nearly half (42%), said L&G.
The level of help has also risen, from an average of £17,500 in 2016 to £21,600 in 2017 – an increase of 23%.
More than three-quarters (76%) of Bank of Mum and Dad assistance goes towards the deposit – just 4% goes solely on mortgage payments.
Parents in the South West of England are the most generous, providing £30,000 of financial support per transaction on average, while Welsh parents give the least – £12,500.
Nigel Wilson, CEO of Legal & General, said: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder. The intergenerational inequality that creates the demand for Bank of Mum and Dad funding continues to widen – younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education.
“Parents want to help their kids get on in life, and the Bank of Mum and Dad is a testament to their generosity, but it is also a symptom of our broken housing market.”