The Bank of Mum and Dad may be lucrative, but is not substantial enough to turn the crisis around, says Nigel Wilson
by Nigel Wilson
If you are aged 50-plus and have children, then the UK’s strongest “Challenger Bank” is probably headquartered in your living room. If on the other hand you are under 40 and trying to buy your first home, your bank managers may well include your parents, or even grandparents.
Legal & General’s research on the “Bank of Mum and Dad”, published today, underscores the huge role of families in an over-priced, under-supplied housing market. Money supplied for house purchases by family members now amounts to £5bn annually: the average parental contribution towards a deposit is now £17,500, and these funds in turn underpin property purchases worth £77bn. This additional supply of money, against a fixed supply of housing is causing unnecessary house price inflation.