Bank of Mum and Dad gifting Herts kids average of £24,000 this year
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It’s predicted that the Bank of Mum and Dad will be involved with 26 per cent of all UK property transactions during 2017, lending over £6.5bn.
According to Legal & General and economics consultancy, Cebr, this puts the Bank of Mum and Dad (BoMaD) on a par with Yorkshire Building Society, the ninth largest mortgage lender in the UK.
These figures are up 30 per cent from £5bn in 2016, with the BoMaD providing deposits for over 298,000 mortgages and helping purchase homes worth £75bn.
The East of England – including Hertfordshire – came third in the list of average donations by region, with an estimated contribution of £24,300, behind the South West (£30,000) and London (£29,400).
Nigel Wilson, CEO of Legal & General, said: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps onto the housing ladder.
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“The intergenerational inequality that creates the demand for BoMaD funding continues to widen – 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.”
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He added that the UK is experiencing “a supply-side crisis in housing” and “we need to build more homes for the young, old and families alike – more quickly and cost effectively”.
Millennials are most likely to be on the receiving end of a parental cash injection, with 79 per cent of funds going to those aged under 30.
In total, BoMaD assistance has gone up by 23 per cent in the last year, from an average of £17,500 in 2016 to £21,600.