Let's hear it for good old Mum and Dad. Not only are Britain's parents the driving force behind a quarter of all mortgages, it turns out that they're chipping in for their kids' rental bills too. New research by Legal & General has found that the Bank of Mum and Dad will be footing the bill for £2.3 billion in rental payments this year (in addition to the £6.5 billion they're putting towards deposits and mortgage repayments).
Britain's ninth largest lender
If the Bank of Mum and Dad was a real high-street establishment, it would be among the top ten British mortgage lenders – on a par with the Yorkshire Building Society. Its shareholders would be happy to report a 30% year-on-year growth, with 34% of first-time buyers looking to family for that coveted deposit money.
Helping with the rent: the statistics
A quarter of renters aged between 25 and 44 have admitted to asking their parents to help them pay rent, with the folks also footing the bill for associated costs such as removal vans, agency fees and security deposits. According to Legal and General, 10% of Britain's young renters always get a hand paying their rent – the average parental payout is £415.
According to Dan Batterton from L&G, a housing market under pressure is holding young people back from renting without help. “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.” The stats seem to back it up: UK rents have risen by an average of 3.1% since last year and 30% of landlords have increased their prices.
Don't blame the youngsters
While it would be easy to blame the rise in parental lending on the 'lazy millennial' stereotype, the truth is that housing is more pricey for today's 20-somethings than its ever been. The Resolution Foundation found that millennials will, on average, pay £44,000 more in rent by the time they turn 30 than their parents' generation did. So it seems the government's look at the housing deficit and rising demand is coming at just the right time.