East of England borrowers are receiving most support from family members
Many aspiring homeowners are forced to depend on the so-called ‘Bank of Family’ or the financial gifting from relatives to get onto the property ladder and this support varies across the regions, new data from Legal & General has revealed.
The research, made in collaboration with the Centre for Economics and Business Research (Cebr), has found that borrowers in the East of England are receiving the most support with an average of £32,100, while those in the West Midlands receive the least at £19,800.
The volume and individual size of support from parents, grandparents, and other family members also depended on whether the borrower lived in an urban or rural area.
According to the Legal & General report, the Bank of Family is expected to support the financing of 216,500 urban home purchases, with the number of rural homes bought with this support estimated to be less than half of that at 100,500.
Not only that, the Bank of Family is estimated to gift £5.7 billion towards urban home purchases, accounting for 70% of the value of Bank of Family support and more than two-thirds of the transactions it facilitates. The average gift or loan size for an urban home is also higher at £26,200, compared to £23,900 for a rural property.
Our research with @Cebr_uk highlights big regional differences in #BankofFamily gifting. But even the smallest average deposit is still a substantial amount. Find out more: https://t.co/QwNmpuLPJW pic.twitter.com/jSiE1YENw5
— Legal & General (@landg_uk) September 20, 2023
Buyers in London are the most likely to receive financial aid from family members, with the average house price standing at almost double the UK average as of April 2023. The survey suggests that the Bank of Family supported two-thirds of recent homebuyers in the capital, more than double the proportion of the North West – the second-placed region at 36%.
London, the South East, the East of England, and the South West see the greatest contributions from the Bank of Family, with the East of England leading all UK regions for the highest average Bank of Family gift or loan at £32,100 despite its lower house prices.
The “Bank of Family” is funding £8.1bn in house purchases. But for those without family support, home ownership can feel out of reach.
— Legal & General (@landg_uk) August 28, 2023
We’re making investment choices that could help unlock the door to the market for younger buyers.#InclusiveCapitalismhttps://t.co/1YzH397Xcf pic.twitter.com/6MqxhCZhlT
“Up and down the country, the Bank of Family is making significant financial sacrifices to help family members onto the housing ladder,” commented Kevin Roberts (pictured), managing director at Legal & General Mortgage Services. “Support is concentrated in urban and southern areas, where house prices are the highest, but is prevalent across the UK.
“While a brilliant lifeline for those able to draw on it, many people will not have access to such generosity and this widespread support is indicative of deep, underlying affordability issues affecting the UK.”
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