The research from Legal & General and Cebr found that family and friends will be involved in 25% of all property transactions that take place in the UK market this year, providing deposits for over 300,000 mortgages.
The average financial contribution is £17,500 or 7% of the average purchase price. 57% of contributions are gifts, 18% are loans with no interest and 5% are loans with interest.
“The Bank of Mum and Dad plays an increasingly vital role in helping young people take their early steps on the housing ladder. But the generosity being displayed by UK families doesn’t make up for intergenerational unfairness – younger people today don’t have the advantages the baby-boomers had, including cheap housing that delivered windfall gains. People will always want to help family members – it is a natural thing to do. 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.
“We have a supply-side problem in housing – we are simply not building enough houses. We need to build more, especially as the Bank of Mum and Dad could soon start to experience a funding crisis of its own.”