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HomeNews Buying Property News

Bank of Mum and Dad’s ability to lend boosted by pension drawdowns worth £30 billion

  • by Editorial Team
  • 19th December 2019
  • Buying Property News
  • Bank of Mum and Dad’s ability to lend boosted by pension drawdowns worth £30 billion photo 1

Bank of Mum and Dad contributed £6.3bn towards property purchases last year


One of the big trends in the property market over the last decade has been the growth in first time buyers who are having their purchase deposits underwritten by their parents and grandparents – the Bank of Mum and Dad or indeed, the Bank of Granny and Grandad!

One reason why parents and grandparents have the money to fund these property purchases are changes in pensions rules that allow them to make substantial withdrawals from their pensions in advance of their retirement.

Those aged 55 and above can access 25% of their savings tax-free and since 2015 they have also been able to access their entire funds*. A total of £30bn has been withdrawn from pension pots since the rules were changed, a large amount of which has gone towards helping children and grandchildren fund home purchases.

According to Legal & General, the Bank of Mum and Dad last year alone contributed £6.3bn towards property purchases.

Support from parents and grandparents has become increasingly necessary as rising property prices have pushed up the amount needed as a deposit. Property price inflation has pushed up the average financial contribution from parents and grandparents to £24,100 – up £6,000 this year.

Whilst the Bank of Mum and Dad is active across the whole of the UK, higher house prices in London mean it is particularly important in the Capital.

Stephen Ludlow, Chairman at ludlowthompson, says: “House price growth now means first time buyers need more help than a decade ago.”

“Many pension pots are now so big that they do more than just fund expenditure by retirees.”

“The recent rally in the UK stock market is going to act as a big fillip to pension funds enabling even more lending from the Bank of Mum and Dad, combined with lower mortgage rates and increased Government support makes now the perfect time for first time buyers to get on the property ladder.”

*Subject to tax at their tax band rate

ludlowthompson maintains its transparency by encouraging customer reviews across a number of platforms. Over a three-year period, we ranked number 1 agent in the UK on allAgents out of 15,000+ agents, with 5300+ 5* reviews. Here is a selection of recent reviews of happy customers of ludlowthompson via Google Reviews:

Sara A via Google reviews:

“Emmanuel from the Canada Water team has been great to work with to find my first home. Friendly, approachable and good communication. Great service!”

Isabel S via Google reviews:

“Since me and my partner decided to look for a flat, Lola from the Dulwich team has always been very professional, friendly, always letting us know about the latest flats on the market. This has been extremely helpful to trying to look for our own place and making our life easier!!”

“Many pension pots are now so big that they do more than just fund expenditure by retirees.”


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