Parents are now effectively a mortgage lender with a £5.7 billion loan book in 2018, according to financial services group Legal & General (L&G).
More than a quarter (27%) of home buyers have received help from the ‘Bank of Mum and Dad’ so far this year. When looking specifically at under 35s, nearly three in five (59%) have received support from parents to get on the property ladder.
Contributions from parents were highest in London, at £31,000 on average. The lowest contributions for property purchases were in Scotland, at £11,000 on average. Nearly half of buyers in London (41%) needed support from parents to purchase a property.
The total value of property requiring parental support will rise to £81.7 billion in 2018, up 5% since 2016, according to L&G. The average contribution has lowered however, from £21,600 in 2017 to £18,000 in 2018.
Staggeringly even homeowners aged between 45 and 55 now need help from elderly parents, with one in five (20%) requiring support to purchase property.
Nigel Wilson, group chief executive at Legal & General, comments: “The Bank of Mum and Dad remains a prime mover in the UK housing market, and will lend the best part of £6 billion to buyers this year, with over 315,000 transactions being underpinned by parental help.
“However, it’s clear that households are feeling the pinch, as Bank of Mum and Dad contributions have reduced by an average of 17% from nearly £22,000 to a still very generous £18,000.
“The fact that in 2018, one in four housing transactions in the UK will be dependent on the Bank of Mum and Dad, while hard-pressed parents are finding it more difficult to provide the funds to help their family with deposits, will further exacerbate the UK’s housing crisis.
“We need to build more homes for the young, old and families alike – more quickly and cost effectively. ”