Bank of mum and dad 'one of UK's biggest mortgage lenders'

Parents spend so much money to get their children onto the housing ladder that they are now among the biggest lenders in the UK, a survey suggests.

The average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year, according to Legal & General (L&G).

Collectively parents have given £6.3bn, high enough to rank the bank of mum and dad 10th if it was a mortgage lender.

Clydesdale Bank, the UK's 10th largest mortgage lender lent £5bn last year.

L&G said thousands of UK buyers were reliant on their parents to either get onto the housing ladder in the first place, or upgrade to a larger home.

Almost a fifth of those who said they had, or would help a family member buy a home, said it was because they felt it was their personal responsibility to help out.

But the financial services firm warned that parents' generosity could hurt their standard of living in retirement.

UK's biggest mortgage lenders in 2018

1. Lloyds Banking Group £42.5bn

2. Nationwide £35.7bn

3. Royal Bank of Scotland £30.5bn

4. Santander UK £28.3bn

5. Barclays £23.1bn

6. HSBC Bank £21.5bn

7. Coventry Building Society £9.2bn

8. Yorkshire Building Society £8.7bn

9. Virgin Money £6.8bn

10. Clydesdale Bank £5bn

*Data from UK Finance, the trade body for UK banking and financial services

L&G's research, based on a poll of 1,600 parents, found more than half were using cash to help their children, but others were withdrawing money from their pensions or said they would consider using equity release from their homes.

Despite this, it found that more than a quarter of those surveyed were not confident they had enough money to last through their retirement.

Meanwhile, 15% said they had already accepted a lower standard of living due to helping out their children.

Chris Knight, chief executive of L&G's Retail Retirement division, said retirees had "a vast range of considerations" to take into account when deciding whether to help out, including "setting aside funds for any future care needs they may have".

"Many are using their pensions and savings to help out and unfortunately this could be leaving some facing a poorer retirement," he said.