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  • Writer's pictureSarah Ruivivar

Bank of Mum and Dad: Millennials' Housing Lifeline

📸 ModelProp / Midjourney

It's no secret that the UK housing market has become a steep mountain to climb, especially for first-time buyers.

Over the past 50 years, average UK house prices have skyrocketed by a staggering 158%, even when adjusted for inflation. This has left millennials (those aged 28-43) grappling with a housing market far more challenging than any previous generation has faced.

According to the Institute for Fiscal Studies (IFS), the average age of homeownership for millennials now stands at 34 years old, a whole seven years higher than the baby boomer generation (those aged 60-76). This stark contrast paints a clear picture of the uphill battle millennials are facing in their quest to get a foot on the property ladder.

In response to these challenges, a surprising trend has emerged: the rise of the 'Bank of Mum and Dad'. Research from mortgage lender Together reveals that a whopping 20% of millennials now rely on their parents to provide deposits for their first homes. This is a significant leap from the mere 11% of their parents who needed the same assistance when they were young.

Furthermore, the study found that one in five millennials have had to move back in with their parents to save for a deposit, highlighting the lengths this generation is going to secure homeownership.

Alan Davison, Director of Customer Sales at Together, sympathetically notes, "If a millennial had a pound for every time they had heard 'When I was your age, I'd already bought a house' from a parent, relative or older colleague, they'd probably have enough money to purchase a property."

However, the reality is that millennials are navigating a very different and more challenging market than their parents did. High inflation and looming interest rate decisions add to the uncertainty, making the 'Bank of Mum and Dad' an increasingly crucial lifeline for millennials striving to own their homes.

While the current state of the housing market may seem daunting, millennials are not losing hope. A hopeful 60% aim to purchase their first homes within the next 5-10 years. As they continue to navigate this challenging landscape, the support from the 'Bank of Mum and Dad' will undoubtedly remain a significant factor in the UK housing market.

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