The ‘Bank of Mum & Dad’ in London and South East England is worth an estimated £103 billion and could assist in the purchase of more than £1 trillion worth of homes in the UK.
That’s according to a new report from JLL’s residential research team, in conjunction with YouGov, which explores the impact that the Bank of Mum & Dad and inheritance will have on the UK housing market.
It’s estimated that between a quarter and half of all home purchases in London and South East England could be assisted by the Bank of Mum & Dad with the average pot coming in at £55,300. The average hand out per child in London and South East England is £24,800 and while 70 percent of parents say all monies passed down will be pure gift 26 percent of parents will use their own inheritance to them to help their children onto the housing ladder.
“We all know that the Bank of Mum & Dad has helped many beneficiaries on to the housing ladder but the numbers revealed in this research are astounding,” says Neil Chegwidden, Director, Residential Research at JLL.
“The Bank of Mum & Dad in London and South East England alone amounts to more than £100 billion. If this money is used as a 10 percent deposit it could help fund more than £1 trillion of home purchases.”
The impact for the London and South Eastern England housing markets is huge, providing a ‘crutch’ for house prices in these regions, but Chegwidden believes it is more likely to lead to further upward pressure on prices.
“The worrying social element is that the Bank of Mum & Dad phenomenon is set to extend the gap between the ‘haves’ and the ‘have-nots’,” he adds.
“With Bank of Mum & Dad support likely to push house prices even higher when affordability is already stretched it means that the Bank of Mum & Dad will become even more important for the privileged parts of society, but inevitably leaving other households further behind.”
The majority of those surveyed said they believe the affordability gap will widen over the next 20 years.