The Bank of Mum and Dad, would be equivalent to a top 10 Mortgage Provider!
The ‘Bank of Mum and Dad’, would be equivalent to a top 10 Mortgage Provider!
According to research by Legal & General, the Bank of Mum and Dad will help finance a quarter of UK mortgage transactions in 2016.
Parents are set to lend their children £5bn to help them on to the property ladder this year. If the lending power of these parents were combined, the “Bank of Mum and Dad” would be equivalent to a top 10-mortgage provider.
The Chief Executive of Legal & General Nigel Wilson said: “The Bank of Mum and Dad plays a vital role in helping young people to take their early steps on to the housing ladder.”
The financial services firm estimated that parents will provide deposits for more than 300,000 mortgages, purchasing homes worth £77bn in 2016. With the average contribution being £17,500 or 7% of the average purchase price.
Legal & General pointed to the disparity between wage growth and house prices – with the latest official figures showing average annual pay rises of around 2% currently at a time of house price increases of 7.6%.
Not all young people have parents who can afford to help them and some who do still do not have enough to buy a place of their own. Added Wilson. The report warned that relying on parental support might soon be unsustainable as parents could be giving away more than they can afford.
We all want to support our Children where possible, setting up a Junior ISA and saving a regularly amount on a monthly basis will build up a pot of money which your Children can use in the future, for a house deposit if they wish.
Use the Savings Calculator to see how much money you would need to save on a monthly basis in order to save a sum like £17,500 for your Child, it could be as little as £60 a month*.
Visit www.childrensisa.com today and start saving for when they grow up!
*Monthly amount based on setting up a Children’s ISA for a Child who is 2 years old, investment for 16 years and 5% growth per annum to achieve a pot of £17,594.17.
Please bear in mind past performance is not necessarily a guide to future performance and the value of your investment may fall as well as rise, and any income received in the form of dividends may fluctuate. You may not get back the full amount when the account is closed. If paying regular monthly contributions please bear in mind that if contributions are not maintained you will be less likely to achieve the investment amount that was originally projected.