A recent report by Legal & General has revealed that the ‘Bank of Mum and Dad’ will lend over £6.5 billion this year, making it one of the UK’s biggest lenders. These funds are going towards deposits for more than 298,000 mortgages.
It is predominately the under 35’s, with more than half of new homeowners in this group, receiving help from the’ Bank of Mum and Dad’ to get on the housing ladder, but even one in ten over 55’s say they will get support from their parents.
As house prices continue to rise in comparison with wages, it is more difficult for young people to get on to the housing ladder without parental support
Parents are providing the most help in areas like London and the South East where house prices are at the highest, but now 40% of new homeowners in the South West and East Midlands and 30% in Wales and the North West are being supported by parents. It is estimated that parents will help to fund the purchase of £75 billion worth of homes.
Nigel Wilson, chief executive at Legal & General stated: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps on to the housing ladder.
He believes the inequality between the generations that has created the demand for parental funding has arisen because” younger people today don’t have the same opportunities that the Baby-Boomers had, including affordable housing, defined benefit pensions and free university education.”
All parents want to help their children get on in life, but the current situation is “a symptom of our broken housing market. We need to build more homes for the young, old and families alike – more quickly and cost effectively.”
If you are a first time buyer trying to get on the property ladder and looking for advice get in touch with Peter Robinson & Co. Their team of expert conveyancers can help you every step of the way, even if you have not found your perfect property yet!
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