According to recent research by finance experts Legal & General (opens in new tab), a larger proportion of Britons than ever before is having to rely on the bank of mum and dad in order to buy a home.
The numbers are predictably higher in the 35 to 44 age bracket – 43 per cent of Britons in this age group have received some form of financial assistance from family or friends. What is more surprising – and somewhat disturbing – is that nearly a third (26 per cent) of those aged 45 to 54 still have had to rely on financial help from family to buy property. This is partly to do with the average age of first-time property ownership creeping up, but it turns out that many of those who have accepted financial help are families with children of their own, unable to afford a larger family home themselves.
Yet the bank of Mum and Dad is also feeling the pinch, with the average contribution down from £21,600 last year to £18,000 this year, and with people citing uncertainty about their own future as the top reason for not being able to help as much they might have done previously. Of those who do offer help to their loved ones, over 70 per cent dip into their own cash savings, with only 4 per cent of those aged 55 and over using equity release.
Regardless of the method used to help family members get on the property ladder, the bank of mum and dad is an unsustainable financial model in the long run. For one, it creates a stark devision within Generation Rent, with those whose family aren't able to help unable to get on the property ladder. Nor does it solve the problem of insufficient housing in the UK, which can only be resolved by building more affordable homes.