The ‘bank of mum and dad’ – or BOMAD – helps fund more than a quarter of UK property purchases, according to new research.
Figures from Legal & General and economics consultancy Cebr suggest young homebuyers and first-time buyers are becoming increasingly reliant on their parents or even friends or family members.
Friends and family are expected to lend more than £6.5bn in 2017 for purchases, up 30% from £5bn last year.
The money is helping to provide deposits for more than 298,000 mortgages to help buy homes worth £75bn, and means the bank of mum and dad is involved in 26% of transactions.
Parental assistance is expected to have risen from an average of £17,000 in 2016 to £21,600 this year with 79% of the funding going to people under 30.
Legal & General chief executive Nigel Wilson said: "The bank of mum and dad continues to grow in importance in helping young people take early steps onto the housing ladder."
Compounding the issue locally, house prices in Greater Manchester have increased by more than those in the south, according to Hometrack.
Homes in the region have increased in value by 8.8% over the past 12 months to March 2017 compared to 5.6% in London – the lowest increase in the capital since 2013.
Our Chief Executive Mike Hanson said: “The market is getting tougher for first-time buyers as house prices continue to rise.
“The recent Hometrack report suggests house prices rose faster in Manchester than any other region in the UK – this places a lot of stress on an applicant’s ability to both save for a deposit and afford a mortgage. We therefore expect to see ever more first time buyers relying on family or government support to achieve their ambitions.
“Our Help-to-Buy: ISA provides a cash bonus for potential first-time buyers saving for a deposit and our innovative family assist mortgage allows family helpers to use their savings to assist first time buyers without having to give the money away.”
The Vernon helped 26 first-time buyers in 2016 while the average loan was £146k.