Parenting

‘Bank of mum and dad’ to give out £6billion this year


The ‘bank of mum and dad’ is predicted to hand out £6.3 billion worth of loans this year, making it equivalent to the UK’s 11th biggest mortgage lender (Picture: PA)

The ‘bank of mum and dad’ is predicted to hand out £6.3 billion-worth of loans this year, making it equivalent to the UK’s 11th biggest mortgage lender, according to research.

Parents are also becoming more generous, parting with an average £24,100 to give the younger generation a leg up onto the housing ladder.

That sum dwarfs last year’s average contribution of £18,000, according to the study by Legal and General and the Centre for Economics and Business Research (Cebr).

But despite average loan sizes increasing, a drop in sales volumes across the housing market means parents and guardians will fund nearly a fifth fewer property purchases this year than in 2018.

The bank of mum and dad is expected to be involved in more than a quarter of a million (259,400) property purchases this year.

While this is down from 316,600 transactions last year, it still amounts to 19 per cent – nearly one in five – transactions in the UK mortgage market.

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Parents are handing over, on average, £24,000 to help younger generations get a foot on the property ladder (Picture: Science Photo Library)

In total, the bank of mum and dad will help buyers to purchase property worth nearly £70 billion this year, the report said.

And while 62 per cent of millennials aged under 35 need their parents’ support, it is not just the younger generations being helped, the research found.

More than a fifth, 22 per cent, of people aged between 45 and 54 have received financial assistance from the bank of mum and dad to purchase their latest property.

Around around seven per cent of over-55s have also received help from family or friends to buy their latest home.

Nigel Wilson, group chief executive at Legal and General, said: ‘The bank of mum and dad continues to be the “iceberg” mortgage lender beneath the surface of our housing market – all but invisible yet exerting a massive influence, funding purchases across the country and helping people to defy the economics of affordability and realise their housing dreams.

Swastikas and homophobic graffiti on tombs in New Calton Burial Ground close to the Scottish Parliament. June 17 2019 . See SWNS story SWSCgraffiti. Mindless yobs have daubed vile graffiti including swastikas on a war memorial at a historic cemetery. A tour guide with a group from New York came across the nasty work at the New Calton Burial Ground, Edinburgh. They were left horrified by the foul paintwork over the weekend at the Regent Road cemetery popular with visitors to the Capital. The crudely drawn and illiterate graffiti included the phrase; ?No more gays in here? at the entrance to the cemetery and ?always hate gays? above two swastikas on a family?s private plot.War memorial sprayed with swastikas and ‘no more gays’ graffiti

‘This year, parents or grandparents, family or friends are set to lend thousands more to fund nearly one in five house purchases.’

Research also shows that their key role in the housing market is set to continue.

More than a third (35 per cent) of prospective buyers who are planning to purchase a home in the next five years said they expect to rely on financial support from their family.

The research was compiled using a survey of more than 1,700 borrowers and more than 2,000 adults who had lent money as well as Cebr’s forecasts which used HM Revenue and Customs (HMRC) property transactions figures.

Here is a list of the average amounts lent by the bank of mum and dad in 2019 regionally, according to the study (a figure for Northern Ireland was not available):

– North East, £13,900
– North West, £24,200
– Yorkshire and the Humber, £17,200
– East Midlands, £16,000
– West Midlands, £13,700
– East of England, £25,500
– London, £31,000
– South East, £29,000
– South West, £29,700
– Scotland, £16,400
– Wales, £30,600





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