The Bank of Mum and Dad will fork out to support nearly one in five transactions this year, making it the equivalent of the 11th largest mortgage lender in the UK.
Parents, family and friends in the ‘bank’ will support an estimated 259,400 transactions in just this year alone – more than the 201,964 that Help to Buy has done in five years.
However, while the Bank of Mum and Dad is digging ever deeper into its pockets, helping offspring buy property worth nearly £70bn this year, it will actually be funding almost 20% fewer purchases than last year.
Last year, it helped fund 316,600 transactions.
The Bank of Mum and Dad is not just limited to parental pockets: other family members and friends also help out cash-strapped house buyers.
More than a third (35%) of people expecting to buy a home within the next five years say they will do so with help from the Bank of Mum and Dad.
Nigel Wilson, group chief executive at Legal & General which produces the figures annually, 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.
“This year, parents or grandparents, family or friends are set to lend thousands more to fund nearly one in five house purchases.
“The Bank of Mum and Dad is a symptom of Britain’s broken housing market and it goes far beyond millennials relying on their parents as more older borrowers look to family and friends for financial support.
“Our reliance on ‘BoMaD’ funding is an increasingly skewed facet of the UK housing market.
“It’s dependency, not generosity. It’s socially divisive and it’s creating a ‘locked out’ generation of first-time buyers who aren’t lucky enough to benefit from this kind help.
“It’s also almost certainly eroding older people’s finances when they need it to fund care and retirement – parents, grandparents, even friends are digging ever-deeper into their savings and pensions.”
Meanwhile separate research, from online mortgage lender Trussle, has revealed that 58% of children aged between 18 and 34 are still living at home. Nearly a quarter of parents (23%) don’t charge rent in order to help them save for a deposit.
Average BoMaD contribution in 2019 and 2018 by UK region*
| Region | Estimated value of the average BoMaD contribution in 2018 | Estimated value of the average BoMaD contribution in 2019 |
| North east | £12,000 | £13,900 |
| North west | £12,900 | £24,200 |
| Yorkshire and the Humber | £16,900 | £17,200 |
| East midlands | £17,300 | £16,000 |
| West midlands | £14,700 | £13,700 |
| East of England | £17,900 | £25,500 |
| London | £30,600 | £31,000 |
| South east | £21,700 | £29,000 |
| South west | £19,300 | £29,700 |
| Scotland | £10,800 | £16,400 |
| Wales | £30,600 |
*Excludes those that did not receive any financial assistance from family and friends
Where do these old folk get their money from?
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Equity in their property?
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‘Lender?’ – that would imply that there’s a repayment element involved. They’ve not met my kids.
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What options are left if you are on a national average wage, you dont have Bank Of Mum and Dad, and you don’t want to use Help To Buy?
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Renting
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If Shelter get their way you won’t even be able to do that!
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No Government wants to tackle the issue of high house prices, as they do want to alienate a large chunk of the electorate. (help to buy did very little apart from inflate prices and increase the profits of the homebuiders) Instead they meddle with the PRS coming in such a way that probably does very little to help the renter.
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Forget the young people not being able to afford to buy a property, what about the 30-40 yr olds that cannot get on the property ladder due to low wages and sky-high property prices.
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agree, plenty of those, but they are the forgotten generation
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The prices are so high because bank of mum and dad are artificially stimulating the market, if they didn’t then prices would stabilise.
Also if rtb and htb were withdrawn in full without apology then prices would level out, these are the reasons the market is broken, artificial stimulus where demand remains and therefore it isn’t required for the market to be healthy.
We’ve pumped the athlete that is the housing market with so many steroids and blood doping and other drugs and now we wonder why its in intensive care!
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