Research on the Bank of Mum and Dad

Research on the Bank of Mum and Dad

Moneywise reports “Families need to talk more openly about their finances before offering to help kids onto the property ladder, according to a report from the London School of Economics (LSE).

Parents who help their kids on to the property ladder are not necessarily high earners, as many are pensioners, but they have wealth through homeownership, savings, inheritances and investments, according to 'The Bank of Mum and Dad: How it really works', published today by the LSE and sponsored by the Family Building Society.

The research involved an online survey of almost 800 customers of Family Building Society, plus interviews and a focus group.

Typical 'Bank of Mum and Dad' donors are older, have higher levels of savings and are more likely to own their own homes, and were more likely to live in the south of England.

Most of the transactions in the study involved parents giving or lending money to their children.  About half of the transactions were for deposits on house purchases and the remainder used for mortgage payments, stamp duty and legal costs.

Parental contributions varied across the regions, with the overall average being a generous £59,248, rising to £76,2290 in London.

Around 50% provided money for some or all of the deposit, while approximately 20% paid for stamp duty or legal costs.

Meanwhile, some 10% paid helped with monthly mortgage payments and a similar number supported a mortgage by becoming a guarantor or a joint mortgagee”  Read the full article 

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