'Bank of mum and dad' helping to boost the property market

 
'Bank of mum and dad' helping to boost the property market

Parents who are assisting their grown-up children in getting a footing on the property ladder are increasingly helping to boost the market, thanks to a rise in the number who are offering financial support through loans or gifts to help pay a mortgage deposit. 

According to the latest data released by Legal & General, British parents and grandparents are giving their children and grandchildren as much as £5 billion per year collectively as a way to help them onto the ladder, which astonishingly makes this demographic the equivalent of the tenth-largest lender in the property market as a whole. 

This year alone, it is expected that newcomers to the property market will be able to get the help of their family members in as many as 300,000 transactions, with the homes involved in these purchases coming to a total value of as much as £77 billion. 

It will mean that parents' and grandparents' money is likely to be involved in as many as one in every four property transactions that takes place in the UK this year, giving the 'bank of mum and dad' more prominence than ever before in the property market. 

The report seems to highlight one major issue in the property market at the moment, that young people are hit so hard by the rising price of property that it has become virtually impossible to get themselves onto the property ladder without the help of their parents. 

Nigel Wilson, chief executive officer of Legal & General, said: "People will always want to help family members as it is a natural thing to do. Relying so heavily on the Bank of Mum and Dad however risks increasing inequality as many young people today are not lucky enough to be able to access parental support when buying a home, or can’t afford to buy even with parental help."