The Bank of Mum and Dad (BoMaD) is set to lend £6.5 billion in 2017, up from £5 billion in 2016, to help their grown-up children get on the property ladder.
According to research by Legal & General, BoMaD will provide deposits for more than 298,000 mortgages this year, helping to purchase homes worth up to £75 billion.
This accounts for 26% of all property purchases taking place, putting BoMaD level with the 9th biggest mortgage lender in the UK.
BoMaD funding has also risen to £21,600 this year, up from £17,500 a year ago.
Adults under the age of 30 are the biggest receivers of BoMaD, accounting for 79% of funding.
Parents in the South West provide the most financial support (£30,000) to their children compared to London (£29,400), while parents in Scotland (£15,500) and Wales (£12,500) contribute the least funding.
Nigel Wilson, CEO of Legal & General, said:
“Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder.
“Parents want to help their kids get on in life and the Bank of Mum and Dad is a testament to their generosity, but also a symptom of our broken housing market.
“Younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education.
“BoMaD 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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