The Bank of Mum and Dad will have a hand in more than a quarter (26%) of UK property transactions in 2017, Legal & General research has revealed.
L&G said the Bank of Mum and Dad will lend £6.5bn in 2017, up from £5bn in 2016, putting it on par with the ninth largest mortgage lender in the UK.
What is more two in five (42%) homebuyers will receive financial assistance from friends or family this year.
Nigel Wilson, chief executive of Legal & General, said: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder.
“The intergenerational inequality that creates the demand for BoMaD funding continues to widen – younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education.
“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.”
This is the second year Legal & General conducted research on the Bank of Mum and Dad, and Wilson reckoned the year-on-year results are very worrying.
He added: “Transaction volumes are down in the housing market but BoMaD funding is growing exponentially.
“This is not a good thing, nor is it sustainable or equitable for our parents, the lenders, and young people, the borrowers.
“We need real action to fix the housing market and restore affordability for all.
“Institutions like Legal & General can regenerate not just residential housing, but the towns and cities in which the homes are built.
“Infrastructure, jobs and local economic growth are all key to creating thriving communities where people want to live.”
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