A quarter of homebuyers in the UK financed their house purchase with a loan or handout from the so-called Bank of Mum and Dad (Bomad) in 2016. That added up to a mighty £5 billion given to buyers from parents, family members and friends.
Most of those withdrawing from Bomad are millennials, with 89 percent of recipients aged under 30, according to the report from Legal & General. In 2017, Bomad is expected to lend or gift £6bn, funding property deals worth around £75bn.
The research, carried by Legal & General with the Centre for Economics and Business Research (Cebr), revealed that the money either loaned or gifted by the Bank of Mum and Dad would put that “institution” among the top 10 lenders in the UK, making this avenue of funding one of the most important right now for young buyers.
Not enough houses being built
However, Nigel Wilson, Legal & General’s chief executive, warned that this sort of lending is unsustainable while he described the UK’s housing market as “broken”.
He said: “Younger people today don’t have the same opportunities that the baby boomers had, including affordable housing, defined benefit pensions and free university education.
“Parents want to help their kids get on in life, and the bank of mum and dad is a testament to their generosity, but it is also a symptom of our broken housing market.
“The UK is experiencing a supply-side crisis in housing – we are simply not building enough houses. We need to build more homes for the young, old and families alike, more quickly and cost effectively.”
While there are no simple solutions on the horizon to the twin issues of finance and supply, there is a simple solution to hand if you need a property valuation report, a HomeBuyers Survey or a RICS Level 3 Survey.
Surveyor Local provides a guiding hand
Surveyor Local’s experience and professional team can guide you through the process and arrange the survey that best suits your requirements. All the surveyors we work with are qualified and registered with the Royal Institution of Chartered Surveyors (RICS).
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