The ‘Bank of Family’ is expected to help fund 42% of UK property purchases made by those under 55 years old, contributing to a total of 335,000 housing transactions supported by family lending in 2024
One in five (19%) parents and grandparents who helped family members get on the property ladder used their own property wealth to do so, according to new research from Legal and General and the Centre for Economics and Business Research.
The ‘Bank of Family’ is expected to help fund 42% of UK property purchases made by those under 55 years old, contributing to a total of 335,000 housing transactions supported by family lending in 2024 – the highest number of property purchases since Legal & General began tracking lending from family members in 2016. Gifting from parents and grandparents is also forecasted to reach £11.3 billion by 2026.
To help meet these costs, a fifth (19%) of those providing support are doing so by downsizing their property (12%), using equity release (8%) or remortgaging (4%). Among Legal & General’s customers, 9% used equity release for financial gifting in the first six months of 2024.
While gifters who use equity release are required to seek financial advice, the research found that the vast majority of parents and grandparents who made a financial gift (74%) did not seek the guidance of a professional before parting with their money.
Lorna Shah, MD of retail retirement at L&G, said: Property wealth remains one of the most significant assets for families across the country, so it comes as no surprise that relatives are using it to provide financial support to younger members buying a home.
Although products such as lifetime mortgages are always supported by specialist financial advice it is important that anyone making a significant gift seeks help from a financial adviser, even if their property isn’t the source of their funds. Our research shows that, at the moment, very few parents or grandparents seek out professional advice when offering financial gifts to family members, unless they use a fully advised product such as equity release, and this can impact their finances in the long term, she said.