'Bank of Mum and Dad' - One Of The UK's Biggest Lenders?
The ‘Bank of Mum and Dad’ lending will reach £6.5bn this year, according to new research.
We recently wrote about how as many as 8% of first-time buyers were now relying on the ‘Bank of Gran and Grandad’ but a study from Legal & General and Cebr suggests that parents will now be involved in 26% of UK property transactions.
This translates as a 30% increase on lending from 2016 and will see the bank of mum and dad help to fund almost 300,000 mortgages in 2017 and property purchases worth around £75bn in total.
One of the biggest banks in the country
To put this into perspective, the £6.5bn number is only marginally smaller to the amount lent by Yorkshire Building Society, the ninth-biggest mortgage lender in the country.
Almost 80% of this goes to millennials and parental assistance averages will be up more than 20% year-on-year:
- 2016 Average - £17,000
- 2017 Averages - £21,600
Why is this happening?
Nigel Wilson, the chief executive of L&G, pointed towards the UK housing market and suggested this is a direct result of it not working properly. He said:
Parents want to help their kids get on in life, and the bank of mum and dad is a testament to their generosity, but it is also a symptom of our broken housing market.
The UK is experiencing a supply-side crisis in housing – we are simply not building enough houses. We need to build more homes for the young, old and families alike, more quickly and cost effectively.
As we continue to expand across Yorkshire, our new land and new homes team offer specialist support for property development - and buying new build homes in Yorkshire. Take a look at our expertise to get the best value whether you are building, buying or selling.
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