The “bank of mum and dad” is behind one in four house sales in the UK, a report has revealed – but Scottish parents stump up less cash for their offspring than anywhere else in the UK.
The study found that some 27 per cent of buyers this year will receive help from friends or family, up from 25 per cent in 2017, but the study found parents are increasingly showing signs of feeling the pinch.
Across the UK, the report, from Legal and General and economics consultancy Cebr (Centre for Economics and Business Research), predicts that cash stumped up by parents will make the bank of mum and dad the equivalent of a £5.7 billion mortgage lender in 2018.
However, Scots parents will help out with a typical contribution of £10,800 towards the purchase price – the lowest of all parts of the UK – while those who have offspring living in London fork out £30,600.
The report said the value of bank of mum and dad-supported property purchases in 2018 will rise to £81.7bn – a 5 per cent increase since 2016. Parents will help 316,600 loved ones buy a home – up from 298,300 in 2017.
But while the bank of mum and dad remains a major lender, parents across the UK are typically providing smaller sums, the report said. The average contribution will decline from £21,600 in 2017 to £18,000 in 2018, according to the predictions, while total lending has reduced from £6.5 billion in 2017.
The research involved surveys and analysis of existing figures, including HM Revenue and Customs (HMRC) house sales reports.
Nigel Wilson, group chief executive at Legal and General, said: “The bank of mum and dad remains a prime mover in the UK housing market, and will lend the best part of £6bn to buyers this year, with over 315,000 transactions being underpinned by parental help. However, it’s clear that households are feeling the pinch, as [bank of mum and dad] contributions have reduced by an average of 17 per cent from nearly £22,000 to a still very generous £18,000.”
Youngsters in the south-east of England benefit from the second highest parental contribution at £21,700, while parents in the north east of England spend the next least after Scotland.