Why First-Time Movers in Wembley Are Banking on Mum and Dad

This two-minute read looks at parents’ integral role in helping young people get on the property ladder.

Why First-Time Movers in Wembley Are Banking on Mum and Dad
There’s one financial institution that never seems to go out of fashion, and that’s the dear old Bank of Mum and Dad (or BOMAD for people who like acronyms).
 
About half of all first-time buyers (FTBs) last year relied on BOMAD, with parents dishing out a record £9.8 billion to help their offspring get on the property ladder.1 The average contribution was £58,000. 
 
And in the past ten years, BOMAD has coughed up £54 billion, assisting 1.4 million buyers.2
 
What’s driving the trend? 
There’s certainly been a lot of talk lately about millennials and their spending habits.
 
TV property presenter Kirstie Allsopp sparked debate with her suggestion that young people ditch their gym memberships and Netflix subscriptions if they want to become property owners. (Ironically, Kirstie received a helping hand from BOMAD when she bought her first flat in 1996.)
 
Twitterstorms aside, there’s no doubt that wage rises have not kept pace with property prices over the years. 
 
The average house in the UK now costs more than eight times average earnings. In the mid-1990s, house prices were around four times average earnings.3
 
FTBs are also getting older. These days, the average FTB is 31. A decade ago, it was 29.4
 
Other influencing factors
Things were particularly tough for FTBs during the early days of the pandemic because of changes to mortgage availability. 
 
Most lenders withdrew their 95% loan-to-value products, heightening the need to call on BOMAD for help getting the deposit together.
 
However, the situation has since eased, and many 95% loan-to-value deals have been reintroduced. 
This news has been tempered by rising gas prices, interest rates, and inflation, so it’s swings and roundabouts for FTBs.
 
How do they find the money?
While some parents draw on existing savings, a growing number are downsizing and releasing some equity to their children in the process.
 
Rather than bequeathing all their wealth, many parents are deciding to share some funds sooner rather than later.
 
For up-to-the-minute news on the property market in Wembley, contact us here at Grey & Co.
 
1 Source: Savills
2 Source: Savills
3 Source: Schroders/Bank of England, 2020
4 Source: Halifax Bank, 2021
 
 

Get in touch with us

First Name*
Last Name*
Your Email Address*
Mobile Phone*
Are you looking to*
Please enter message here*
Please confirm that it is okay for us to contact you about this information as well as products and services. (You will always be given the right to unsubscribe at any point in the future)*

Register for Property Alerts

Ever missed out on the perfect property just because you heard about it too late, or the Estate Agent never told you about it as it was slightly outside of your criteria? Never miss out again by using our “Heads Up Property Alerts”.

Meet Abigail

  Hello, my name is Abigail, and I am the Grey in Grey & Co. I started working here in 2002 as a Junior Negotiator and have worked my way up the ranks since then. I took over running the company in 2014 and have been enjoying the roller coaster that is leadership ever since.   During my 20 plus years at Grey & Co I have dealt with the sale of over £100,000,000 worth of property and overseen the management of assets worth £250,000,000 for clients around the world.   I also had the pleasure of working with my father, the founder of Grey & Co, for 15 years before he sadly passed away and from him, I learnt the work hard ethic and our values today are still the ones that he founded the company on all those years ago.   Be Remarkable, Be Passionate, Be Humble and Be Better.   As a community centric boutique family agency, you couldn’t find a better partner to take with you on your property journey.

Meet All The Team