News that the ‘Bank Of Mum and Dad’ will pump £6.5 billion into property transactions this year has reignited debate over Britain’s “broken” housing market.
Research from Legal & General and Cebr showed that parents will be involved in 26% of all property transactions in 2017, contributing towards more than 298,000 mortgages and helping to purchase homes worth £75 billion.
The findings put the ‘Bank of Mum and Dad’ on par with the Yorkshire Building Society, the ninth largest mortgage lender in the UK, the Press Association reported.
But they have infuriated many people, with some criticising the current system for barring social mobility.
Responding to the report, Labour MP David Lammy said the “broken, deeply unfair housing market” was “entrenching inequality”.
The former higher education minister tweeted: “What about those without an inheritance or without wealthy parents?
“Concept of ‘affordable’ homes has lost all meaning across the country.”
According to the report, millennials will be the biggest recipients of the cash, with 79% of the money going to people under 30.
But dozens of young people pointed out on social media today that their parents can’t afford to give them money for a deposit:
Legal & General chief executive Nigel Wilson said: “The Bank of Mum and Dad continues to grow in importance in helping young people take their early steps on to the housing ladder.
“The inter-generational inequality that creates the demand for Bank of Mum and Dad funding continues to widen - younger people today don’t have the same opportunities that the baby-boomers had, including affordable housing, defined benefit pensions and free university education.
“Parents want to help their kids get on in life, and the Bank of Mum and Dad is a testament to their generosity, but it is also a symptom of our broken housing market.”
He said the UK was experiencing a “supply-side crisis” in housing, adding: “We need to build more homes for the young, old and families alike - more quickly and cost effectively.”