Parents’ money will help people buying around £70 billion worth of property.
Legal & General
British parents spend so much on supporting their children in buying a home they figure among the U.K.’s top 10 mortgage lenders, a new survey has revealed.
Last year, parents gave their children an eye watering £5.7 billion, making them virtually the 10th largest mortgage lender in the country.
In comparison, Clydesdale Bank, the 10th official lender in the U.K., “only” lent £5 billion.
Research from financial services firm Legal & General (L&G) also shows that the average parental contribution for home buyers in 2019 is £24,100–34% up from the £18,000 recorded last year.
In some areas the figure is higher, reaching £31,000 on average in London.
L&G estimated that parents’ lending will reach £6.3 billion this year, supporting more than a quarter of a million (259,400) buyers–one in five of every property bought this year.
In total, parents’ money will help people buying around £70 billion worth of property.
L&G’s research was based on a poll of 1,600 parents. More than half of the respondents said they use cash to help their children, while around 15% said they are accepting a lower standard of living because of the financial help they give.
What’s more, a quarter of the people surveyed said they don’t feel confident they would have enough money after they retire.
“Parents and grandparents across the U.K. want to see their loved ones settled in homes of their own and are giving generously as part of the bank of mum and dad,” said Chris Knight, L&G’s chief executive for retail and retirement.
“Many are using their pensions and savings to help out and unfortunately this could be leaving some facing a poorer retirement, especially if they don’t get the right advice. There is around £1 trillion of property equity owned by the over-55s.”
U.K.’s top 10 mortgage lenders in 2018, according to UK Finance, are:
1) Lloyds Bank (£42.5 billion)
2) Nationwide (£35.7 billion)
3) Royal Bank of Scotland (£30.5 billion)
4) Santander UK (£28.3 billion)
5) Barclays (£23.1 billion)
6) HSBC Bank (£21.5 billion)
7) Coventry Building Society (£9.2 billion)
8) Yorkshire Building Society (£8.7 billion)
9) Virgin Money (£6.8 billion)
10) Clydesdale Bank (£5 billion)