Bank of Mum and Dad is now the 11th largest lender in the UK

The Bank of Mum and Dad is reported to be digging ever deeper in 2019.

Family and friends are spending an average £6,000 more than in 2018 to help loved ones onto the housing ladder.

Financial services group Legal & General says BoMaD lenders are being more generous this year than ever before.

Jump in loan size

The typical contribution in the UK is increasing to £24,100 - as against last year's figure of £18,000.

The jump in BoMaD loan size has increased total lending for the Bank of Mum and Dad by 10% this year - reaching £6.3billion from £5.7billion in 2018.

As a result, it is now the 11th largest mortgage lender in the UK.

BoMaD will support hundreds of thousands of buyers across the country in 2019 - being involved in more than a quarter of a million property purchases.

In total, it will help buyers purchase homes worth nearly £70billion this year.

In Scotland, the average BoMaD loan has soared from £10,800 last year to £16,400 in 2019.

Legal & General adds that the increase in UK loan size could be because BoMaD lenders are supporting family and friends to buy bigger properties.

Three-bedroom houses or flats are said to be the most commonly purchased properties in 2019 (44%).

And 15% of lenders were even helping loved ones to purchase properties with four or more bedrooms.

Complex role

This year's findings also suggest that the Bank of Mum and Dad is playing a more complex role in the housing market than previously thought.

Millennials aged 35 and under continue to rely on mum and dad the most, with 62% needing financial support from their parents or other family members and friends.

However, BoMaD is helping more than just young first-time buyers.

More than a fifth of people aged 45-54 have received financial assistance from BoMaD to purchase their latest property.

Around 7% of over-55s have also received help from family or friends to buy their most recent home.

This support for older buyers is expected to double, with 14% of Britain's over-55s expecting assistance from BoMaD for a future house purchase.

The average UK house price rose from £224,000 in March 2018 to £227,000 in March 2019.

Comment

Nigel Wilson, group chief executive at Legal & General, said: "The Bank of Mum and Dad continues to be the 'iceberg' mortgage lender beneath the surface of our housing market - all but invisible yet exerting a massive influence, funding purchases across the country and helping people to defy the economics of affordability and realise their housing dreams.

"This year, parents or grandparents, family or friends are set to lend thousands more to fund nearly one in five house purchases.

"The Bank of Mum and Dad is a symptom of Britain's 'broken' housing market and it goes far beyond millennials relying on their parents as more older borrowers look to family and friends for financial support.

"Our reliance on BoMaD funding is an increasingly skewed facet of the UK housing market. It's dependency, not generosity. It's is socially divisive and it's creating a 'locked-out' generation of first-time buyers who aren't lucky enough to benefit from this kind help.

"It's also almost certainly eroding older people's finances when they need it to fund care and retirement - parents, grandparents, even friends are digging ever deeper into their savings and pensions."

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