Bank of Mum and Dad struggles to help offspring buy homes

The Bank of Mum and Dad is feeling the strain of the cost-of-living crisis, with many parents forced to cut back on financial support for their children’s home purchases.

A survey by Aldermore found that 59% of first-time buyers have seen their parents reduce or withdraw support.

Plus, 19% expect their loved ones to contribute around half of their deposit.

Homebuying in the UK

Aldermore’s director of mortgages, Jon Cooper, said: “The Bank of Mum and Dad has become a fixture of homebuying in the UK.

“Dipping into cash savings has long been commonplace for parents helping their children but they are beginning to feel the pinch when it comes to this support.”

He added: “While gifting to children is admirable, it’s important that families don’t overextend themselves or compromise their own finances in providing support to their children.”

Selling second properties

To help their children, parents are taking drastic measures, including selling second properties, downsizing their homes and even dipping into their pensions.

Some are even allowing their children to live rent-free in the family home to help them save.

Mr Cooper is also warning parents to seek professional advice from a mortgage broker.