Quarter of first-time buyers relying more on parental help

Parental support to help young people to move onto the property ladder is set to play in a part in a quarter of all property transactions in 2017, according to a new report.

Ashley McInulty had to move back into her parents home so she could save for a deposit. Picture: Ian Georgeson

The “bank of mum and dad” will lend more than £6.5 billion over the course of the year - up £1.5bn from 2016.

The findings put the bank of mum and dad on a par with the ninth largest mortgage lender in the UK and will be involved in 26 per cent of all property transactions that take place in the UK market this year.

Sign up to our daily newsletter

The i newsletter cut through the noise

Research conducted by financial services group Legal & General and economics consultancy Cebr suggests up to 79 per cent of that cash will end up going to people under the age of 30.

The funds will go towards deposits for more than 298,000 mortgages, and helping others to purchase homes worth £75bn, according to the report.

Legal & General chief executive Nigel Wilson described the scale of parental lending as “a symptom of our broken housing market.”

He said: “The bank of mum and dad continues to grow in importance in helping young people take their early steps on to the housing ladder.”

“The inter-generational inequality that creates the demand for bank of mum and dad 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.”

Last month, Ashley McInulty, member engagement executive at property firm ESPC, told of her issues getting on the property ladder.

Ms McInulty, 30, bought her first home with boyfriend Chris in South Gyle, Edinburgh in March 2016. However, while she didn’t receive parental help, she called 
for better education for first-time buyers entering the market.

“There’s a lack of knowledge of the housing market with no real way for people to learn what is required of them,” she said.

“I think there needs to be a better education for first-time buyers about what they need to be doing to get on the property ladder, whether that’s through an extension of help-to-buy scheme or a different plan.”