Building infrastructure

Mum and Dad support the pandemic property ladder

The pandemic has meant first-time buyers are even more reliant on loved ones to get them on the property ladder, with the Bank of Mum and Dad funding even more purchases in 2020

5 Oct 2020

Meet our experts

Sir Nigel Wilson

Group Chief Executive

The mortgage market has seen record levels of demand from consumers since reopening after lockdown, and even with fewer high loan-to-value mortgages available, many first-time buyers are looking to get their housing plans on the move. A growing number are turning to the Bank of Mum and Dad (BoMaD) to give them the help they need, our latest research reveals. Even with the economic uncertainty caused by the pandemic, more property purchases are being funded by loved ones in 2020 (23%) than in 2019 (19%).

Our new report reveals that more than half of first-time buyers under the age of 35 receive financial support from BoMaD, equating to more than 73,000 property being supported by loved ones. These first-time buyers benefit from an average of £19,000, but some receive much more: 21% of respondents under 35 receive more than £30,000. All of this adds up £1.36 billion in BoMaD contributions in 2020, helping loved ones purchase £18.11 billion of property.

But benefitting from these financial contributions isn’t specific to the under-35s. In fact, 61% of BoMaD’s lending in 2020 (£2.14 billion) is to help those over 35 – in part due to the fact that these first-time buyers tend to be looking for larger, more expensive properties – and will support 30,000 more property purchases in this age group than for those under-35.

Without financial support from loved ones, far fewer property purchases would be possible. Some 71% of under-35s say that if it weren’t for this, their purchases would be delayed by an average of four years; for those over 55, one in 10 would have had to delay their purchase.

Pandemic and uncertainty

Following the economic uncertainty caused by the pandemic, mortgage lenders are starting to return to the market. The problem is that few are currently offering high loan-to-value options, which means buyers need more of ‘their own’ money. Although in 2020, BoMaD will fund 85,000 fewer property purchases as a result of the crisis (though still funding more than 2019), 24% of buyers have become more reliant on BoMaD since the pandemic, and a third of all people looking to buy in the next five years admit to planning on getting financial help from family or friends. And chances are they’ll still get it. Of those who have seen their incomes fall during the pandemic, 74% have said they’re no less willing to help loved ones onto the housing ladder, and nearly a quarter of housing transactions, worth £50 billion, will be backed by BoMaD in 2020.

The Bank of Mum and Dad is playing a clear and present role for many buyers, it remains a symptom of the broken housing market.

Nigel Wilson


Legal & General

Nigel Wilson, Legal & General CEO, says: “Britain’s housing sector is a critical engine behind the country’s economic growth and we need a strong property market now more than ever to drive the economic recovery from Covid-19.”

And while first-time buyers will do doubt be grateful to loved ones for their support, BoMaD is not a sustainable solution. “While the Bank of Mum and Dad is playing a clear and present role for many buyers, it remains a symptom of the broken housing market,” continues Wilson. “Thousands of people simply don’t have a Bank of Mum and Dad to rely on. For those that do, generous family members are still having to draw on retirement savings and rainy-day funds, even as the country experiences its most significant economic challenge since the Second World War.”