Parents to hand out £6.3bn in 2019 to help children buy first homes
‘The bank of mum and dad continues to be the iceberg mortgage lender beneath the surface of our housing market’
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Parents are predicted to hand out £6.3bn worth of loans this year in a bid to help their children get on the property ladder, according to new research.
For many people, the only route to home ownership is with the help of the so-called “bank of mum and dad” and it seems that more parents are chipping in to help their offspring buy homes than ever before.
A survey of more than 1,700 borrowers and more than 2,000 adults by financial services company Legal and General and the Centre for Economics and Business Research (Cebr) found that parents are expected to be involved in more than a quarter of a million (259,400) property purchases this year, making the bank of mum and dad equivalent to the UK’s 11th biggest mortgage lender.
This figure amounts to nearly one in five (19 per cent) transactions in the UK mortgage market, the report said.
In total, the bank of mum and dad will help buyers to purchase property worth nearly £70bn this year.
The research also found that parents are becoming more generous, handing out £24,100 on average to their children.
This is more than £6,000 higher than the average contribution last year of £18,000.
And it’s not just millennials that are looking to family members for help getting on the property ladder.
The research found that while 62 per cent of people aged under 35 need help from the bank of mum and dad, more than a fifth (22 per cent) of people aged 45 to 54 have also received financial assistance from family members.
Furthermore, around seven per cent of over-55s have received help from family or friends to buy their most recent home.
Nigel Wilson, group chief executive at Legal and General, said: “The bank of mum and dad continues to be the ‘iceberg’ mortgage lender beneath the surface of our housing market – all but invisible yet exerting a massive influence, funding purchases across the country and helping people to defy the economics of affordability and realise their housing dreams.
“This year, parents or grandparents, family or friends are set to lend thousands more to fund nearly one in five house purchases.“
Here are the average amounts lent by parents in 2019 regionally, according to Legal and General and Cebr:
- Northeast, £13,900
- Northwest, £24,200
- Yorkshire and the Humber, £17,200
- East midlands, £16,000
- West midlands, £13,700
- East of England, £25,500
- London, £31,000
- Southeast, £29,000
- Southwest, £29,700
- Scotland, £16,400
The report also showed that the bank of mum and dad’s role in the housing market is set to continue, with more than a third (35 per cent) of prospective buyers who are planning to purchase a home in the next five years saying they expect to rely on financial support from their family.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments