The ‘Bank of Mum and Dad’ will contribute to 25% of all UK mortgage purchases this year, making them a ‘top ten’ lender.
Family and friends are expected to provide deposits of £5bn, averaging £17,500 or 7% of the purchase price for 300,000 mortgages towards homes worth £77bn this year.
A total of 256,400 mortgage borrowers will get parental support, 27,500 will get help from friends, and grandparents will help fund 22,500.
Legal & General said that a lack of house building and the impact of low annual wage growth at 2%, against rising house prices averaging annual growth of 7.6% were the main reasons.
L&G CEO Nigel Wilson said: “If we are ever to end or reduce our reliance on the Bank of Mum and Dad, we need a new innovative approach to housing. Helping first-time buyers is necessary – but not the whole solution.
“We need to modernise house building and make it more efficient so that we can increase supply and quality for all forms of tenure, and all income and age groups, from students to pensioners.”
The report concludes: “Families clearly cannot continue to use all of their net wealth to help their offspring onto the housing ladder without putting their own financial stability at risk.”
In London, which has the highest and fastest growing house prices, this year 51% of buyers will get assistance with their mortgage and in the south-east the 50% mark is expected to be reached in 2025.