A recent report by Legal & General revealed that the UK’s 11th largest lender is the Bank of Mum and Dad (BoMaD).
BoMaD will fund 20% less house purchases in 2019 than in 2018 as the report sees a reduction in house transactions over the UK, but the contributions they make will increase to an average £24,100 from last year’s contributions of £18,000 as the BoMaD will be involved in over a quarter of a million property purchases.
Total lending is up 10% due to the BoMaD helping family get on the property ladder from £5.7 billion in 2018 to £6.3 billion.
There is also a movement in the size of loans that buyers are obtaining as the BoMaD are raising more funds to help their family.
Most common purchases in 2019:
Legal & General also found the BoMaD not just helping young first-time buyers but also helping:
Legal & General suggest that the BoMaD is expected to be behind 1 in every 5 house purchases this year.
Many suggest the housing market needs to see an increase in new affordable properties to encourage jobs, infrastructure and in particular in communities that are in decline. This is clearly a good thing but we suggest that the ever increasing population in the UK will still drive property prices upwards as population is increasing faster than the speed of housing construction.