It’s no secret that ‘the bank of mum and dad’ can really divide friendship groups. Given that it can feel all but impossible to get on the property ladder without help from parents, it’s easy to see why it’s become such a contentious issue among Gen Z and millennials.
Don’t expect this situation to change any time soon, because the ‘bank of mum and dad’ seems to be growing in importance. According to a new survey by Zoopla, nearly two-thirds of parents (64%) whose grown-up children owns homes said they helped with the deposit. Their average contribution came in at a massive £32,440 – up more than £10,000 on the average figure of £21,600 reported in 2017.
More than one in ten parents (11%) said they covered the entirety of their kid’s deposit, while around one in seven (14%) said they contributed more than £50,000.
“Whilst it is accepted that many parents give their children help to get on the property ladder, these new figures reveal just how high a proportion of young adults who own homes today have had financial support from their family,” said Daniel Copley of Zoopla. “It shows that those who managed to ‘go it alone’ and purchase a home without parental support are very much in the minority and that the transfer of intergenerational housing wealth is key.”
Copley also pointed out that this is no great surprise given that house prices have been rising faster than the average salary for decades, making “forever renting” a distinct likelihood for many young people. In November, the average house price in the UK climbed above £250,000 for the first time.
“Despite the financial hurdle that a first home purchase can present, Zoopla data demonstrates that first-time buyers are prolific in the market and have been for some time,” Copley added. “Putting more money towards the purchase of a home can help reduce mortgage payments and in turn can unlock lower interest rates, so it’s clear that, when it comes to property, the ‘bank of mum and dad’ will be in business for a long time to come.”
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