L&G have found parents lend over £5 billion to help their children buy property
Legal & General have found in a new survery that parents will lend their children over £5 billion in 2016 so they can get on the property ladder contributing to over 25% of all mortgages with an average loan of £17,500.
“The Bank of Mum and Dad plays a vital role in helping young people to take their early steps on to the housing ladder,” said Legal and General chief executive Nigel Wilson.
In London, Mr Wilson said this funding method was reaching “tipping point”, with more than half of average household net wealth (excluding property assets) going towards helping their offspring on to the housing ladder.
Mr Wilson also said that not all young people were able to access parental support, while many who could were still unable to afford a home.
He added: “We need to fix the housing market by revolutionising the supply side – if we build more houses, demand can be met at a sensible level and prices will stabilise relative to wages.”
Research from L&G and economics consultancy Cebr suggests the Bank of Mum and Dad will provide deposits for more than 300,000 mortgages, purchasing homes worth £77bn this year.