Parents are the 10th largest mortgage lender in the UK.
That’s according to a survey by Legal & General (L&G) which found that the average parental contribution for homebuyers this year is £24,100 ($29,279).
It says that this amount has risen more than £6,000 over the last year — high enough to put the ‘Bank of Mum and Dad’ into 10th place if it was classed as a mortgage lender.
Collectively, parents have given £6.3bn to their children to buy property, overtaking the official 10th place — Clydesdale Bank, which lent £5bn in total in 2018.
The official list for the UK’s largest mortgage lenders, which does not include parental contributions, by the trade body for UK banking and financial services UK Finance, is here:
1. Lloyds Banking Group: £42.5bn
2. Nationwide: £35.7bn
3. Royal Bank of Scotland: £30.5bn
4. Santander UK: £28.3bn
5. Barclays: £23.1bn
6. HSBC Bank: £21.5bn
7. Coventry Building Society: £9.2bn
8. Yorkshire Building Society: £8.7bn
9. Virgin Money: £6.8bn
10. Clydesdale Bank: £5bn
While parents’ generosity is enabling many of the younger generation to get on the housing ladder, the source of the wealth could significantly affect their retirement health, L&G said.
Their poll of 1,600 parents found that many were withdrawing money from their pensions or said they would consider using equity release from their homes to help their children.
On top of that, more than a quarter of those surveyed said that they were not confident they had enough money to last through their retirement.