Busy times for the Bank of Mum and Dad

House prices may have stopped their rocket like ascent but getting on the first rung of the property ladder remains a struggle.

At Continuum, we know at least one lender determined to help.

This lender is BOMAD, or to use the full name behind the acronym, the Bank of Mum and Dad. But BOMAD can itself run short of funds.

The Bank of Mum and Dad is not just limited to parental pockets: other family members and friends also help out first-time home buyers.

Legal & General have just released research for 2019, which shows that BOMAD – together with other family and friends – contributed on average £24,100 to help loved ones onto the housing ladder. Despite a fall in house sales, this is an increase of £6,000 from last year. Across the country the Bank of Mum and Dad will support nearly one in five transactions, with a total funding that outstrips many of the smaller building societies.

Why is BOMAD in such demand?

Despite mortgage repayments being relatively affordable, high house prices make a large deposit essential.

Saving tens of thousands of pounds is impossible for many couples, especially if they have rent to cover. BOMAD has become the solution. Parents who have become property rich with house price inflation over the last few decades are happy to share the benefits, and in many cases, transfer money to their children as a gift.

This may not be entirely altruistic. Research from online mortgage lender Trussle has revealed that 58% of children aged between 18 and 34 are still living at home.

Not just first-time buyers

This year’s findings suggest that BOMAD is playing a bigger role in the housing market than previously thought. BOMAD will help buyers buy property worth nearly £70bn this year, making it the 11th largest mortgage lender in the UK.

More than a third of people expecting to buy a home within the next five years say they will do so with help from the Bank of Mum and Dad

But home buyers are calling on their branch of BOMAD more than once. 62% of Millennials, those aged 35 and under, continue to rely on Mum and Dad for their steps up the property ladder. More than a fifth of people aged 45-54 have had financial assistance from BOMAD to purchase their latest property. According to research, in nearly 60% of cases the money is not paid back.

The ongoing demands mean that BOMAD can run out of cash. Mum and Dad may want to help, but find their own resources are being stretched at a time when they may be preparing for retirement, or even already retired.

How Continuum can help

Many parents will be happy to help their children – but being too generous could mean problems, especially if it means raiding retirement funds. Simply writing a cheque may not be the best way to give your offspring the support they need.

At Continuum we believe the answer is forward planning. We can work with families, and create a long-term bespoke wealth management solution, whether their priority is helping their offspring or enjoying their own golden years.

The best time to start your wealth management plan is when children are still young, and certainly well before they are thinking about buying homes of their own.

Of course, we don’t believe that supporting BOMAD is the only answer. As part of our service, we always want to work with the younger generation, and help them to understand the need for building up savings. Sitting down with them and helping them look at a monthly budget, how to live within it and how to save is all part of the service.

To ensure there are no problems in the future and help you to enjoy peace and quiet in your own home again some professional advice may be essential.

At Continuum, we are happy to help.


The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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Book an initial consultation with one of our independent financial advisers or call us on 0345 643 0770 if you would like to discuss further.






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