By Esmée Hardwick-Slack
A survey of more than 1,700 borrowers and over 2,000 adults by financial services company Legal and General and the Centre for Economics and Business Research (Cebr) found that parents are expected to be involved in more than 259,400 property purchases this year. This makes the ‘bank of mum & dad’ equivalent to the UK’s 11th biggest mortgage lender.
For many, the only route to home ownership is to borrow from their mum and dad, and it seems that more parents are chipping in to help their offspring than ever before. The figures show that in total, parents will help buyers to purchase property worth nearly £70bn in 2019, making up for 19 per cent of transactions in the UK mortgage market.
The research also found that while 62 per cent of people aged under 35 need help from their parents, more than a fifth of people aged 45 to 54 have also received financial support from family members. Furthermore, around 7 per cent of over 55s have received help from family or friends to buy their homes.
Group Chief Executive at Legal and General, Nigel Wilson, 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. This year, parent or grandparents, family or friends are set to lend thousands more to fund nearly 1 in 5 house purchases.”
The role of parents and family members in the housing industry is set to continue, with more than a third of the prospective buyers who are planning to purchase a home in the next five years saying they expect to rely on financial support from their family.
Here are the average amounts lent by parents in 2019 regionally, according to Legal and General and the Cebr:
- Northeast, £13,900
- Northwest, £24,200
- Yorkshire and the Humber, £17,200
- East midlands, £16,000
- West midlands, £13,700
- East of England, £25,500
- London, £31,000
- Southeast, £29,000
- Southwest, £29,700
- Scotland, £16,400