Legal & General and Cebr has reported that the Bank of Mum and Dad will be the equivalent of a £5.7bn mortgage lender in 2018.
27% of buyers will receive help from friends or family, up from 25% in 2017. This year, the Bank of Mum and Dad will help 316,600 loved ones buy a home – up from 298,000 in 2017.
The value of Bank of Mum and Dad-supported property purchases in 2018 will rise to £81.7 billion, representing a £4.2 billion or 5% increase since 2016.
However, parents are providing smaller sums – the average Bank of Mum and Dad contribution will decline from £21,600 in 2017 to £18,000 in 2018. Total lending has reduced from its height at £6.5bn in 2017 to £5.7bn in 2018. This is, however, still an overall increase against £5bn of lending in 2016.
Nigel Wilson, group chief executive at Legal & General, said: “The Bank of Mum and Dad remains a prime mover in the UK housing market, and will lend the best part of £6bn to buyers this year, with over 315,000 transactions being underpinned by parental help.
“However, it’s clear that households are feeling the pinch, as ‘BoMaD’ contributions have reduced by an average of 17% from nearly £22,000 to a still very generous £18,000.
“The fact that in 2018, one in four housing transactions in the UK will be dependent on the Bank of Mum and Dad, while hard-pressed parents are finding it more difficult to provide the funds to help their family with deposits, will further exacerbate the UK’s housing crisis.
“We need to build more homes for the young, old and families alike – more quickly and cost effectively. Legal & General is playing its part by announcing an initiative to build thousands of new affordable homes.”