We reported on several stories last year how the so-called “Bank of Mum and Dad” was propping up the UK housing market, including being the UK’s ninth biggest mortgage lender and paying an estimated £2.3bn a year in rental fees for their children. There has been a change in the trend, however, suggesting that parents are "feeling the pinch".
Reporting on analysis from Legal & General (L & G), the BBC highlights how parents cannot afford to lend as much as they used to:
- the average parental contribution for home buyers this year will be £18,000, - a decrease of 17% from last year's £21,600;
- despite this, over one in four buyers are still expected to receive financial help from friends or family.
And while smaller sums are being loaned (overall lending is expected to drop from £6.5bn in 2017 to £5.7bn this year), L&G said the Bank of Mum and Dad was still "a prime mover" in the UK housing market - with 27% of home buyers getting assistance - up from 25% last year.
The firm anticipates that 317,000 housing transactions in 2018 will rely on at least some parental help.
There are also regional differences, where, in London for example, the average parental contribution is £31,000 compared with £11,000 in Scotland.
Buyers in London (41%) also receive more parental help than in any other area.
It’s not just first time buyers needing help
Nearly three in five of under-35s are most likely to receive help from their parents, but older homebuyers also rely on the Bank of Mum and Dad, with 20% of those aged between 45 and 55 receiving financial assistance.