A survey published this week has shown that relatives, chiefly parents, are set to pour over £6.5 billion into the housing market this year in order to help their children buy a home, an astonishing figure which means the bank of mum and dad is shelling out a similar amount to the 9th largest mortgage lender in the country. This is a 30% increase on the amount they lent in 2016 and means that parents will be involved in more than 25% of UK property transactions, usually by lending or giving their children the money needed to pay for a deposit on a house or flat.
The reason for this is simple: Britain’s dysfunctional housing market. A decades-long shortage of supply has led in many parts of the country to rampant house price inflation, making even the most basic home unaffordable for people on ordinary salaries and forcing them to rely on overpriced and insecure rented housing. No wonder they are turning to their parents, who bought their homes back when a family house was a realistic aspiration rather than a pipe dream for anyone except the seriously wealthy.
We have been here before, of course: the Open Dictionary entry for the bank of mum and dad dates back more than five years, to March 2012. Despite the repeated promises of politicians, the supply of affordable housing looks unlikely to increase to the required levels any time soon, meaning that property-rich baby boomers are likely to have to continue dipping into their savings to help their offspring onto the property ladder for some time to come.
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