The shape of things to come
Research carried out last year showed that the ‘bank of mum and dad’ is now one of the top ten mortgage lenders in the UK, with parents set to lend their children £5 billion in order to help them get on the property ladder. With house prices now so out of sync with wages, the research estimated that parents will provide deposits for more than 300,000 mortgages.
Studies have shown that people receiving financial help to buy their first home is on the increase. Among current home owners, those living in London (32%) and the South East (31%) — two areas with the highest house prices in the UK — were most likely to have had financial support from family and friends.
In London, parental contributions made up more than 50% of the wealth (excluding property) of the average household in the capital.
At the same time, the number of people aged between 20 and 34 living with their parents has reached a 20-year high, with one in four yet to fly the nest. Affordability plays a part in this — saving for a deposit is one of the biggest hurdles to home ownership for young people.