Bank of Mum and Dad is one lender to see a boost from the pandemic. Here’s why that’s a problem

Parental gifts and loans are projected to be behind 23 per cent of transactions this year, writes James Moore. But only a fortunate few can count on them as lenders rein in their appetite for risk

Paid for by the Bank of Mum and Dad? Its lending is set to increase (PA)

A rare lender to get a shot in the arm from the pandemic is the fabled “Bank of Mum and Dad” (Bomad).

It was one of Britain’s most important mortgage providers before Covid-19 burned its way through the UK economy and housing market, being involved in about one in every five (19 per cent) purchases last year, according to research by life insurer Legal & General and the Centre for Economics & Business Research.

That figure had actually been declining, but the pandemic has reversed the trend and it is now projected to rise to 23 per cent this year.