The UK’s 10th largest mortgage lender

Foresight Wealth StrategistsGeneralThe UK’s 10th largest mortgage lender
October 10 , 2019 / Posted by Lissa Horton / General /

The UK’s 10th largest mortgage lender

Which institution loaned more money for UK property purchases than TSB Bank, Bank of Ireland, Skipton Building Society and Clydesdale Bank in 2018?

It was, of course, that well-known institution – The Bank of Mum and Dad. This ever-growing financial powerhouse contributed over £5.7 billion to help their children get a foot on the housing ladder.  It would have ranked them at number 10 of the biggest lenders for mortgages in 2018.

Legal & General recently did some research and estimated the following for 2019:

  • Lending from the Bank of Mum and Dad will add up to £6.3 billion
  • Over 259,400 property purchases will be supported by the Bank of Mum and Dad
  • The average contribution of friends and family will be £24,100 (£31,000 in London)
  • The value of properties purchased via the Bank of Mum and Dad will be nearly £70 billion

Property prices have risen over the past decades, making it ever more difficult for young people to buy their first property.  The average UK property price for a first home has increased 39% since 2008 and the average first-time buyer is now two years older than a decade previously.  The twin forces of spiraling house prices and stagnant wage growth for younger people has meant that parents often feel a compulsion to help.

Luckily, the Government has introduced initiatives to make house purchase easier for first-time buyers.  One of the most popular products is the Lifetime ISA which offers a great way for 18 to 39-year olds to save towards their first home.  You can invest up to £4,000 each tax year before your 50th birthday (the LISA must have been opened before your 40th birthday), and the Government will give you a 25% bonus of up to £1,000 per year on contributions.  Your children can withdraw money tax-free when used to buy their first home up to £450,000 (using a mortgage) – or after age 60 to fund later life care.

If you would like to know more about the best ways of saving for a mortgage – or even the best ways of helping fund your children’s house purchases, then please contact us on 0161 926 9350.

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