The Bank of Mum and Dad is now equivalent to one of the UK’s top 10 mortgage lenders and is set lend over £5bn in 2016, according to Legal & General.
In research with the Centre for Economics and Business Research, L&G estimates parents will be involved in 25 per cent of mortgage transactions taking place in the UK this year, backing the purchase of 300,000 homes worth £77bn.
On average, parents will back their children to the tune of £17,500, or 7 per cent of the average purchase price, with 57 per cent of contributions as gifts.
L&G predicts 18 per cent of contributions will be loans with no interest, while 5 per cent will include interest.
L&G chief executive Nigel Wilson says: “If we are ever to end or reduce our reliance on the Bank of Mum and Dad and Government initiatives such as Help to Buy 2, we need a new innovative approach to housing.
“Helping first-time buyers is necessary – but not the whole solution. We need to modernise housebuilding and make it more efficient so that we can increase supply and quality for all forms of tenure, and all income and age groups, from students to pensioners.”