Housing

The Bank of Mum and Dad is giving less money to their children to buy houses

Parents are feeling the squeeze in the housing market as lending figures for mortgages fall

London, England, United Kingdom - February 11, 2015: FOR SALE and TO LET real estate agent signs outside residential housing development in Hackney. Many house rental and sales agency signs in a row. Multiple sign boards.

With sky-high rents eating into millennial’s coffers, it’s no surprise that more than ever are forced to turn to the ‘Bank of Mum and Dad’ to buy a house.

More than a quarter of young buyers have received help from family and friends, according to figures released by insurer Legal and General and economics consultancy Cebr.

These figures mean, according to Legal & General, that parents and close relatives are virtually acting as the equivalent of a £5.7bn mortgage lender. But that figure is now dropping, with the average contribution slipping from £21,600 in 2017 to £18,000 this year.

Still, the Bank of Mum and Dad is still contributing nationally to 108,800 out of 316,600 total property purchases, with 43 per cent of buyers aged 35 to 44 getting a helping hand while 26 per cent of those aged 45 to 54 are also relying on parents. The latter group may well be at the peak of their earnings and have children of their own – their financial woes represent the struggles of getting on the property ladder with the average age of first-time buyers reaching the thirties in some areas.

The need to prop up struggling offspring is also having a detrimental impact on parents, with 10 per cent of the Bank of Mum and Dad admitting that their generosity left them feeling less secure financially. And 17 per cent were forced to cut back as a result of their outlay, whether that be forgoing holidays, a car or other luxuries, according to Legal & General.

The organisation insists that the trend is “neither desirable nor sustainable” and is clear on the solution to the problem – building more affordable homes. The UK government has pledged to do just that, announcing that it would build 300,000 homes a year by the mid-2020s.

“The Bank of Mum and Dad remains a prime mover in the UK housing market, and will lend the best part of £6 billion to buyers this year, with over 315,000 transactions being underpinned by parental help,” said Legal & General chief executive Nigel Wilson.

“However, it’s clear that households are feeling the pinch, as (Bank of Mum and Dad) contributions have reduced by an average of 17 per cent from nearly £22,000 to a still very generous £18,000.”

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
Beat the Streets music festival funds new homes for rough sleepers: 'If we could do more, we would'
Homelessness

Beat the Streets music festival funds new homes for rough sleepers: 'If we could do more, we would'

Rents in UK are rising at highest rate in decades. Will they keep going up?
rents uk
Renting

Rents in UK are rising at highest rate in decades. Will they keep going up?

Scotland needs real-time rough sleeping count to save lives
rough sleeping and temporary accommodation in Scotland is under the spotlight on Buchanan Street in Glasgow
homelessness

Scotland needs real-time rough sleeping count to save lives

'More bad news for renters': Rental crisis continues with steep rent rises despite inflation falling
inflation is falling but rents are still rising at a faster rate than wages
RENTING

'More bad news for renters': Rental crisis continues with steep rent rises despite inflation falling

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know