'Bank of Mum and Dad' is now a £5bn mortgage lender


In 2016, parents in the UK will lend their children £5 billion to buy their first home or move up the property ladder, a new study has revealed.

This means the Bank of Mum and Dad will help finance 25% of all UK mortgage transactions, making it a top 10 lender.

The research from Legal & General (L&G) and economic consultancy Cebr, found that parents would pay the deposits for more than 300,000 mortgages, buying homes collectively worth £77 billion in 2016.

The Bank of Mum and Dad pays, on average, £17,500, or 7%, of the purchase price of their offspring’s property, with more than half (57%) of parents offering it to their children as a gift.


“The Bank of Mum and Dad plays an increasingly vital role in helping young people take their early steps on the housing ladder,” says Nigel Wilson, L&G’s chief executive.

However, he points out that not everyone has parents who can afford to offer this level of support.

“Relying so heavily on the Bank of Mum and Dad, however, risks increasing inequality as many young people today are not lucky enough to be able to access parental support when buying a home, or can’t afford to buy even with parental help,” he says.

Mr Wilson also highlights the need to build more houses and points out that the next generation’s Bank of Mum and Dad won’t be able to afford offer this level of financial assistance in the future. He says that “London is already at the tipping point” when it comes to Bank of Mum and Dad funding.


In a Moneywise.co.uk poll, asking parents if they ever felt pressurised to give their adult children money, nearly a quarter (23%) say they do ‘but only when they are broke’, 18% say their children ‘think my money is theirs’, while almost half (49%) say they don’t feel pressurised to give their ‘kidults’ money, but are happy to discuss help if they need it. A further 10% say their kids know they want them to be financially independent.