It is no secret that getting a mortgage is harder for millennials than ever before, with couples putting off having children or growing families because they don’t own their own homes.
But now it has been confirmed that family wealth is to thank for many young people getting their foot on the property ladder, as the bank of mum and dad becomes officially recognised as one of the biggest lenders in the UK.
A survey by Legal & General found the average parental contribution for homebuyers in 2019 is £24,100, up by more than £6,000 compared to last year.
The average deposit for a first-time buyer in the UK is now £32,841, whereas a typical 20% deposit in London is as much as £80,000.
Collectively, the L&G survey found, parents have given their children £6.3bn in the last year towards home buying – high enough to rank them 10th alongside the big mortgage lenders like high street banks.
This is compared to Clydesdale Bank, the UK’s 10th largest mortgage lender, which lent £5bn last year.
“Despite lending their children money more than 25% of parents aren't sure they have enough to get through retirement.."”
Not only are children relying on their parents to help them get that first step on the ladder, but also to upgrade to a bigger property.
Almost one fifth (20%) of those who said they had or would help a family member buy a home said it was because they felt it was their personal responsibility to do so.
But the financial services firm warned that parents’ generosity could hurt their standard of living in retirement.
The L&G research, which polled 1,600 parents, found more than 50% were using cash to help their children, either withdrawing from their pensions or using equity release from their own homes.
Despite this, it found that more than a quarter of those parents surveyed were not confident they had enough money to last through their retirement. Meanwhile, almost one in six (15%) said they had already accepted a lower standard of living due to helping out their children.