Legal & General have released a report with Cebr that looks into the role of parents when helping their children get on to the property ladder. The report has shown that the Bank of Mum and Dad have helped to fund 23% more properties over the course of the last year. As this does show how generous parents are when helping out their children it is also very worrying that this level of generosity is required. With the demand for first time housing, the action taken by parents to help their children get a house is a sign of the broken house market and illustrates that at the minute there is problems with the supply side of the market.
In 2017 it is thought that the Bank of Mum and Dad will lend more than £6.5 billion in 2017. This figure is a predicted increase form the £5 billion that was lent over the course of 2016. This means that last year parents helped by providing the deposits for more than 298,000 mortgages which helped their children spend a combined £75 billion to buy a house. These statistics put the bank of Mum and Dad level with the 9th largest mortgage lender in the UK and thought to be involved in more than a quarter of transactions. Another worrying statistic that was found in the report by Legal & General and Cebr shows that parents will fund fewer housing purchases this year because of the overall downward trend of housing market transactions. Therefore, if the bank of Mum and Dad is expected to put more money forward this year in to fewer housing purchases, the problem that has led to this course of action isn’t going away, because it is implied that parents will have to put more money forward than 2016 for deposits.
