The total value of lending by the so-called ‘Bank of Mum and Dad’ is expected to reach £6.3 billion in 2019 – half a billion higher than in 2018. Lending at that volume will make it the UK’s 11th largest mortgage lender.
The Bank of Mum and Dad is expected to contribute to 259,400 property purchases this year, a 20% fall on 2018, yet their average contribution of £24,100 is up £6,000 on a year ago.
Nationwide, 77% of lending is to home movers, not first-time buyers. However Joseph Bate, our Canary Wharf Sales Manager, says lending to first-time buyers is the norm in E14. He’s found that the vast majority of first-time buyers he’s dealing with either get their deposit from parents, or else the parents are buying the property outright in cash.
Despite parents doing the majority of lending, they’re not the only alternative ‘banks’ coughing up cash. In 2019 70% of lending is set to be via parents, 10% by grandparents and 20% by other family members.
The average price of a property across the UK was £228,903 in the year to April, 1.4% higher than a year ago. On a monthly basis, average prices rose by 0.7%, the first rise in monthly prices since August 2018. In Greater London the average house price has increased to £502,578.