Bank of Mum and Dad loans now funding property purchases worth £75bn

 
Alys Key
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House Prices Hit New High In The UK
Two in five London house-hunters receive parental help (Source: Getty)

The Bank of Mum and Dad will help to buy homes worth more than £75bn this year, as parents fork out £6.5bn in soft loans to their house-hunting kids.

One in four property transactions in the UK is now funded by parental help, according to new research by Legal and General and Cebr.

The expected total of £6.5bn in loans is up from £5bn last year. Average contributions are also set to rise from £17,500 to £21,600.

This puts the Bank of Mum and Dad on a par with Yorkshire Building Society, the 9th largest mortage lender in the UK.

Millennials are the biggest recipients of parental help, as 79 per cent of funding goes to people under 30.

Nigel Wilson, CEO of Legal and General, said: “Younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education.”

Nearly two in five Londoners receive help from the Bank of Mum and Dad, though only one in five parents said they were happy to give more help to children living in expensive areas, opting instead to give a fixed amount regardless of location.

Yet estimated contributions still varied across the country, with parents in the South West coughing up the most, at an average of £30,000. Londoners were not far behind as average support totted up to £29,400. Welsh buyers receive the least parental help, at an average of £12,500.

But some siblings are more likely to get support than others. Only 40 per cent of parents provide equal support to their kids, with 18 per cent choosing to only help the eldest child.

Wilson added: “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.”

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