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Bank of Family to back almost half of purchases for under-55s with property wealth key source
The Bank of Family is expected to fund around 42% of UK property purchases for under-55s and more are looking to use property wealth, research has shown.
According to research from Legal and General in conjunction with the Centre for Economics and Business Research, this is equal to around 335,000 housing transactions supported by Bank of Family lending in 2024.
It will be the largest number of property purchases made through the Bank of Family since the lender started tracking lending from family members in 2016.
Gifting from parents and grandparents is expected to reach around £11.3bn in 2026, the report noted.
The research said that around a fifth of those were offering financial support to prospective homeowners by downsizing, 8% through equity release and 4% through remortgaging.
Around 9% of Legal and General customers used financial gifting in the first six months of the year.
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The report said that almost three quarters of parents and grandparents who made a financial gift did not seek guidance from an advice professional before making their financial gift.
Lorna Shah, managing director of retail retirement at Legal and General, 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 like lifetime mortgages are always supported by specialist financial advice it’s important that anyone making a significant gift seeks help from a financial adviser, even if their property isn’t the source of their funds.”
She continued: “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.
“As equity release moves more into the mainstream, more people are likely to turn to it for help. The ‘Bank of Family’ is predicted to have a busier year than ever, so we might see more people drawing equity from their property to support their loved ones.”