New research has revealed that the Bank of Mum and Dad is now on a par with the 9th largest mortgage lender in the UK and will be involved in 26% of all property transactions that take place in the UK market this year.
The report, by Legal & General and Cebr, shows the Bank of Mum and Dad (BoMaD) will lend over £6.5 billion in 2017, up from £5 billion in 2016, providing deposits for over 298,000 mortgages, and helping others to purchase homes worth £75 billion.
The research also found that:
- 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%).
- BoMaD assistance has risen from an average of £17,500 in 2016 to £21,600 in 2017 – an increase of 23%.
- Millennials are the biggest recipients of BoMaD funding – 79% of BoMaD funding goes to people under the age of 30.
- 76% of BoMaD assistance goes towards the deposit – just 4% goes solely on mortgage payments.
“The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder,” commented Nigel Wilson, CEO of Legal & General. “The intergenerational inequality that creates the demand for BoMaD 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.”
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