The Bank of Mum and Dad will be the equivalent of a £5.7bn mortgage lender in 2018, according to new research from Legal & General. It estimates 27% of buyers will receive help from friends or family, up from 25% in 2017 - this means that this year, the Bank of Mum and Dad will help 316,600 loved ones buy a home, up from 298,300 last year.
The value of Bank of Mum and Dad-supported property purchases in 2018 will rise to £81.7 billion, representing a £4.2 billion or 5% increase since 2016.
However, parents are providing smaller sums - the average BoMaD contribution will decline from £21,600 in 2017 to £18,000 in 2018.
Other key findings from Legal & General’s “Bank of Mum and Dad” research include:
- BoMaD contributions are highest in London (almost £31,000 per transaction on average) and lowest in Scotland (just under £11,000). More buyers in London (41%) receive BoMaD help than in any other region
- Under 35s are most likely to receive BoMaD assistance with nearly 3 in 5 receiving money from family and friends to buy a property. This drops to just 8% for over 55s
- Even homeowners aged between 45 and 55 are now relying on BoMaD, with one in five (20%) receiving assistance from their parents
Image courtesy TaxRebate.org.uk