Having wealthy parents is useful; we’ve watched enough noughties teen dramas to know that much. But increasingly, it’s also a necessity. At least if you want to buy a house – because parents now among the biggest mortgage lenders in the UK.
According to new research by Legal & General, the average parental contribution for homebuyers is £24,100 this year – a £6,000 increase compared to 2018. In London, it’s even higher at £31,000 on average.
In total, parents are lending their children money for mortgages that amounts to a huge £6.3bn, meaning they lend more than Clydesdale Bank, which as the UK’s 10th largest mortgage provider only lent £5bn last year.
‘Despite a slowdown in house prices, the Bank of Mum and Dad (BoMaD) is digging ever deeper to help their loved ones buy a home in 2019,’ read the report by L&G. ‘[The] contribution dwarfs government schemes to address the problem of housing affordability, such as the Help to Buy schemes. The longest running of these – the Help to Buy equity loan – has still helped fewer people to buy than BoMaD does in a single year.’
Essentially, in a slowing housing market that has seen fewer overall transactions, parents are still forced to spend more and more to help their children get on the housing ladder. And it’s not all wealthy parents with money to burn. L&G warns that the generosity of these contributions is impacting parent’s retirement funds, with some cashing in their pensions, downsizing or taking out further debt themselves.
In fact, more than a quarter of those surveyed weren’t confident they had enough money to last throughout retirement and 15% said they had accepted a lower standard of living in order to help their children.
It seems that not only are millennials (and younger) forced to scrimp and save for the things baby boomers dubbed necessities – but those without large nest eggs are suffering the cost of the housing crisis too.
Ultimately, it speaks to a larger problem about just how unjust our housing market has become. Because, you shouldn’t need to rely on your parents to get on the housing ladder. The government has failed so many when it comes to dealing with this economic crisis, and it shouldn’t be our parents (or the ones who can) swooping in to rescue us, righting the politicians and regulators' wrongs.
Read More: All of the best small room hacks...
Small Room Hacks - Grazia
1 of 5A Corner Rack
Corners are dead space. Good only for shoving furniture up against or chucking piles of dirty clothes into – either way – they're not being used to their full potential. This corner rail means you can now use corners to hang the overspill from your wardrobe, store shoes and still stash dirty clothes in without taking up any extra space.
2 of 5Bed Risers
They might look awful, but that extra six inches of space under your bed that risers can create could be the thing that stops you going mad and moving out. Now, instead of the one box full of 'precious items', you can stack two. Voila – double the hoarding.
3 of 5A Mirror With Storage
This mirror has the double bonus of making your room look bigger (the mirror bit) and providing a place to store your jewellery (the er, storage bit).
4 of 5Command Hooks
For real, these things are your new best friends. Buy ten packs and don't underestimate their value. Hanging things from the walls is a stellar way to store hats, bags, scarves and belts and make use of every last inch of space. Just make sure it looks pretty.
5 of 5Magnetic Pots
Radiators are the bane of the small-roomer. Other than the whole keeping the room warm thing (granted, this can be useful) they stop furniture from fitting neatly into the alcoves you so desperately need it to. Make them into storage space with these magnetic pots – perfect for storing jewellery, hair bobbles, loose change – basically anything that doesn't melt.