Has the Bank of Mum & Dad Helped You Onto the Property Ladder?

May 24, 2016

The increasingly renowned Bank of Mum and Dad are expected to lend a helping hand to 25% of UK property transactions this year. In numerical terms this means that our parents are expected to fork out a combined total of over £5 billion, contributing to over 300,000 mortgages.

 

Each set of parents are anticipated to donate on average £17,500 or 7% of the typical purchase price in order to help their offspring onto the progressively hard to climb property ladder.

 

So why are we continuously having to depend on our parents to help us get a foot on the bottom rung of the property ladder? Since recuperating from the financial crisis, the property market prices have been spiralling uphill at a lot quicker pace than salaries, which has therefore made home ownership a much tougher achievement.

 

Property has become a lot tougher for first time buyers to secure by themselves. Buyers are further hindered by the fact that mortgage lenders are being forced to request larger deposits.

 

The combined sum of hand-outs towards deposits will reportedly make the Bank of Mum and Dad the UK’s 9th biggest mortgage lender this year, so will this not have a knock on effect on the parents finances and put their own monetary stability at risk? Statistics have shown that in London, parental contributions have already made up more than 50% of the wealth of the average household in the capital.

 

Accounts have indicated that some parents are deciding to even downsize their property in order to free up some additional funds for their children to put towards their deposit. Other parents have revealed that the money used to get their son or daughter onto the property ladder would have been given to them later in life as part of their inheritance anyhow, so to use it early makes little difference.

 

Of course not everybody has financially comfortable parents that are willing to help them secure their first property. A larger 75% of the population may be in a position in which they are still seeking a method of finding their ever elusive deposit.

 

 

Josh Cousens – abbotFox

 

 

You May Also Enjoy

Breaking News

London boasts biggest property market gap

UK’s property price gaps exposed: London tops with £838k difference between top and bottom of the market The latest research from eXp UK has revealed the scale of the price divide between the most and least expensive property markets across each region of the UK, with three areas seeing average house price gaps of more…
Read More →
Letting Agent Talk

Questions raised over tenant-agent trust gap

New research from Propoly has found that while over half of tenants describe their letting agent as professional, quick to respond to queries, and efficient in handling maintenance issues, issues still exist, particularly a widespread suspicion that agents are not working in the tenants’ favour. Propoly commissioned a survey of 1,000 UK tenants* to understand…
Read More →
Letting Agent Talk

29 is the age house sharing becomes ‘embarrassing’

but 11% still do it, according to new Nationwide research That equates to 27 million admitting they have felt embarrassed about their living situation With 69% saying living alone is unaffordable, it’s no surprise the average age of those in house shares is 35 From moving home (12%) to living with an ex (10%), as…
Read More →
Estate Agent Talk

1 in 5 London Homes Listed in Last 30 Days

The latest research from London lettings and estate agent, Benham and Reeves, reveals that one in five homes currently for sale in London have been added to the market within the last 30 days, as sellers respond to strong buyer demand. Demand for London homes is strong Benham and Reeves has analysed current residential property…
Read More →
Commercial Agent Talk

Biggest block management headaches revealed

The latest insight from property management specialist, Rushbrook & Rathbone, has found that utilities, cleaning and gardening are the most common block management requirements, accounting for almost two thirds of all call-outs and maintenance tasks carried out in 2025. Rushbrook & Rathbone’s internal data shines a light on what most frequently drives costs when it…
Read More →
Home and Living

Invasive plants could be damaging your property

What every homeowner needs to know. Invasive plants growing in your garden could be causing serious and costly damage to your property without your realising. Some species can undermine foundations, cracking patios and driveways, and spreading rapidly beyond your boundaries, potentially leading to disputes with neighbours. The financial impact can be significant. Left untreated, these…
Read More →