Children are still relying on financial assistance from their parents to get their foot on the property ladder. For ‘Generation Rent’, becoming a homeowner is harder than ever, meaning that the Bank of Mum and Dad continues to play a significant role.
Parental support has become so vital, in fact, that the Bank of Mum and Dad became Britain’s 11th largest mortgage lender in the year to 2018, providing £6.3bn to aspiring homeowners, both young and even some middle-aged adults. Over the same period, 20% of property transactions were supported in this way.
Children have seen a significant increase in parental contributions since 2018, which have risen by over £6,000 to £24,1001 – double the average house price increase of £3,0002. This support for older buyers is expected to double, with 14% of Britain’s over-55s expecting assistance fromBoMaD for a future house purchase . Interestingly, research suggests that it’s not just young adults or first-time buyers benefiting from parental assistance. In fact, 22% of those aged between 45 and 54 have enjoyed a welcome boost from the Bank of Mum and Dad. While around 7% of over-55s have also received help from family or friends to buy their most recent home.
The Bank of Mum and Dad continues to exert a massive influence, funding purchases across the country and helping people to defy the economics of affordability and realise their housing dreams. And, with 35% of prospective home buyers expecting to need financial assistance from their family in the next five years, it would appear that the Bank of Mum and Dad’s prominence in the mortgage market is far from diminishing.
1Legal and General, June 2019
2ONS, March 2019