The Financial Reporter reports that the Bank of Mum and Dad is now on a par with the 9th largest mortgage lender in the UK, and will be involved in 26% of all property transactions that take place in 2017, according to research from Legal & General.
The Bank of Mum and Dad will lend over £6.5 billion in 2017, up from £5bn in 2016, providing deposits for over 298,000 mortgages and helping others to purchase homes worth £75 billion
In 2017 42% of prospective homeowners will receive financial help to buy from friends and family, up from a third in 2016.
However the Bank of Mum and Dad will fund less purchases in 2017 than in 2016 (a -2.5% decrease from 305,900 to 298,300) – but only because overall housing market transaction volumes are down.
Nigel Wilson, CEO of Legal & General, said: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder. The intergenerational inequality that creates the demand for funding continues to widen – younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education. Parents want to help their kids get on in life, and the Bank of Mum and Dad is a testament to their generosity, but it is also a symptom of our broken housing market.
“Transaction volumes are down in the housing market but Bank of Mum and Dad funding is growing exponentially. This is not a good thing, nor is it sustainable or equitable for our parents (the lenders) and young people (the borrowers). We need real action to fix the housing market and restore affordability for all.”
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