Bank of Mum and Dad ‘helping with around half of home purchases among under-35s’
12 October 2020, 00:04
Legal & General said 56% of first-time buyers under the age of 35 had received financial support from their parents.
The Bank of Mum and Dad is now helping to fund one in every two house purchases among the under-35s, research suggests.
Legal & General said 56% of first-time buyers under the age of 35 had received financial support from parents to help them get on to the property ladder.
Nearly three-quarters (71%) of these new home-owners would not have been likely to buy without financial help from family or friends, it found.
Instead, they would have had to delay their housing plans by four years on average.
Legal & General chief executive Nigel Wilson said: “The Bank of Mum and Dad’s role in Britain’s housing market is ubiquitous. Across the UK, parents, grandparents, family and friends are digging into their pockets to help young, hopeful buyers and even growing families to make their housing plans a reality.
“These generous lenders are often funding most or all of the deposit buyers need to step on to or up the ladder.
“But while the Bank of Mum and Dad is playing a clear and present role for many buyers, it remains a symptom of a broken housing market.
“Thousands of people simply don’t have a Bank of Mum and Dad to rely on.
“For those that do, generous family members are still having to draw on retirement savings and rainy day funds even as the country experiences its most significant economic challenge since the Second World War.”
Legal & General research also shows that the Bank of Mum and Dad is giving £19,000 on average to first-time buyers under the age of 35.
And it is not just the younger generation receiving support.
Nearly one in 10 (9%) over-55s planning to buy said they would have had to delay their purchase without financial support from their parents.
Bank of Mum and Dad lenders are still eager to help out, despite many having seen their own incomes dented by the impact of Covid-19, the research found.
Nearly three-quarters (74%) of those who have seen their incomes fall during the pandemic said the crisis has made them no less willing to help loved ones on to the property ladder.
The research included a survey of more than 1,900 adults who have bought a home or are planning to purchase a property in the next five years, and more than 500 parents and grandparents.
