The Bank of Mum and Dad is not just helping their children get on the property ladder, it is also paying for their rent, new research has revealed.
According to Legal & General, the Bank of Mum and Dad will fund £2.3 billion of rental payments in 2017, paying out on average £415 every time a rental payment is made.
The report, conducted with the Centre for Economics & Business Research, found that the Bank of Mum and Dad now helps 9% of renters across the UK, on nearly 460,000 properties.
The Bank of Mum and Dad’s payments to the rental sector are highest in London and the East of England, lending £626 million and £604 million in these areas, respectively.
It also funds £175 million of rental payments in the North West and £369 million in Yorkshire and the Humber.
Previous Legal & General research shows that the Bank of Mum and Dad is the UK’s ninth largest lender.
Dan Batterton, a fund manager at Legal & General, said: “It is a real challenge for young people who are reliant on parental handouts just to make the rent. The intergenerational inequality that creates the demand for the Bank of Mum and Dad funding continues to widen and now it’s affecting renters too.
“The lack of affordable housing, low wage growth relative to inflation and burdens of student debt mean that many kids can’t even rent somewhere without significant contributions from their family. 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.”
