There's a new entry to the top 10 mortgage lenders this week... The Bank of Mum and Dad! With more and more first time buyers struggling to get onto the housing ladder, parents are contributing more than ever to help their children out, even at the expense of their own future income...
It’s made big news this week: parents have, on average, contributed £24,100 to help get their children onto the housing ladder in 2019 - up more than £6,000 from the 2018 average.
This means that, as a lender, “The Bank of Mum and Dad” have overtaken Clydesdale Bank to the number 10 spot for mortgage lenders in the UK, totalling an estimated £6.3bn a year compared to Clydesdale’s £5bn!
In a recent poll of 1,600 parents by Legal & General (L&G), it’s now estimated that more than 50% of parents are using cash to help their children out financially. It’s suggested that almost 20% of those who have already or would help a family member with buying a property, felt it was a personal responsibility to do so.
The research also showed that some are even considering withdrawing money from their pension or releasing equity from their homes in order to help out, despite 25% not being confident that they had enough money to support themselves through retirement. This, of course, potentially leaves them open to a lower standard of living come retirement.
For advice and more information on how to support getting your children onto the property ladder, call us on 0345 345 6788 or click here to submit an enquiry.