A surge in individuals seeking aid from family members to realize their homeownership dreams has been highlighted by a recent study.
Legal & General (L&G) has unveiled findings indicating that financial support from what is colloquially referred to as the “Bank of Family” is anticipated to play a pivotal role in aiding 318,400 property acquisitions this year.
Of all the residential properties acquired by those below the age of 55, a substantial 47% are projected to have been made possible through the assistance of parents, grandparents, or other kin.
However, L&G cautions that those bereft of such familial support could potentially encounter challenges in accessing the housing market.
Having monitored family contributions to home purchases for the past seven years, the financial services group underscores that 2023 is witnessing an unprecedented reliance on family members for securing down payments.
While the term “Bank of Mum and Dad” was traditionally employed to denote this support, L&G has rechristened it the “Bank of Family” to more accurately encompass contributions from a broader spectrum of relatives, encompassing grandparents and reflecting the diverse makeup of modern families.
Research reveals that the average sum extended by families to their dear ones is poised to touch £25,600 this year, contributing to an aggregate lending sum of £8.1 billion. In 2016, when the investigation was first undertaken, total lending amounted to £5.3 billion.
Additional research conducted by Hamptons estate agents in collaboration with Skipton Building Society underscores the escalating role of siblings as a source of funding. This study unveils that siblings are increasingly becoming a significant contributor to initial buyer deposits, constituting an unprecedented 11%, which is more than double the 5% share seen five years prior. On average, sibling contributions amount to £10,250.
