New research suggests that parents will be lending more than £6.5bn this year to help their children get on the property ladder. This is a 30% increase to last years loans of £5bn. First-time buyers will turn to their parents for a loan more this year than previous years as the struggle to purchase a home continues.
The £6.5bn loan is on top of an estimated £2.3bn loan in rental payments. This research from Legal & General and economics consultancy Cebr, means that parents will be involved in 21% of property transactions and are lending the equivalent to the ninth biggest mortgage lender, Yorkshire Building Society. Combined, parents have helped fund mortgages, deposits, moving fees, agency fees and rent of 938,000 properties.
The Resolution Foundation found that ‘millennials have paid an estimated £44,000 more in rent by the age of 30 than the baby-boomers did’, and compared to the 63% of baby-boomers who owned their own homes, only 42% of millenials currently own their house.
For millenials with siblings, they might not be seeing the same amount of help as their older/younger brothers and sisters. The research found that only 40% of parents give equal financial support to their offspring with 18% only supporting the oldest child and 16% supporting the youngest.
Parents, of course, want to help their children progress, but what does this need for parental help suggest? Cheif Executive of Legal & General, Nigel Wilson, said, “it’s a symptom of our broken housing market.”