The Bank of Mum and Dad will lend £5Bn in 2016, to get children on property ladder according to L&G.
Parents lending to help get their children onto the UK property ladder will amount to £5Bn in 2016, helping finance 25% of UK mortgage transactions this year, according to data from Legal & General (L&G).
Research by L&G estimated that the Bank of Mum and Dad will provide deposits for more than 300,000 mortgages, with the homes purchased totalling £77Bn, which would make family the parents equivalent to the 10th biggest mortgage lender in the country.
The problem was acute in London, where buyers got an average of 6.2% of their purchase from parents, which amounts 51% of average household wealth in the capital.
Nigel Wilson, chief executive of financial services firm Legal & General, which carried out the research, said the data showed a number of issues, including house prices being out of sync with wages.
He said: “The Bank of Mum and Dad plays a vital role in helping young people to take their early steps on to the housing ladder.
“Not all young people have parents who can afford to help them and some who do still do not have enough to buy a place of their own.
‘We need to fix the housing market by revolutionising the supply side – if we build more houses, demand can be met at a sensible level and prices will stabilise relative to wages.”
Liberal Democrat leader Tim Farron said: “The fact that the Bank of Mum and Dad has to play such a central role in our housing market shows just how desperate the situation has become for a generation that’s been priced out of a home of their own.
“Something is seriously wrong when only those lucky enough to receive significant financial support from their parents can buy a home, regardless of how hard the younger generation work or save each month.”
The Bank of Mum and Dad’s average financial contribution is £17,500.