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'Bank of Mum and Dad' - One Of The UK's Biggest Lenders?

Posted 01/05/2017

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.

Preston Baker Land & New Homes

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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