Bank of Mum and Dad: Property expert warns teenagers will face stark choices as house prices spiral out of control

Welcome to the Bank of Mum and Dad: Property expert warns teenagers will face stark choices as house prices spiral out of control

"Mum, could you lend me a fiver... and a deposit for a home?"

Tuesday, May 3, 2016

Property expert Louisa Fletcher has warned teenagers leaving school could soon be faced with a stark choice: Go to university, or begin an apprenticeship to start saving for a deposit for a house.

And whatever they decide, one thing is clear – they will need the ‘Bank of Mum and Dad’ to help.

Research from Legal and General has revealed the ‘Bank of Mum and Dad’ (BOMAD) lends £5billion a year to fund their children’s first steps onto the property ladder.

And Fletcher, author of ‘Property Uncovered’, was not surprised by this figure

“To be honest, I can see the BOMAD becoming a bigger player in the market as we move forward,” she told Julia Hartley-Brewer.

“On average, students leave university with £40,000 of debt, whereas on the help-to-buy scheme you are looking at a deposit of £10,640.

“I hate to say it but there could be a choice of 'do I go on to further education and get a degree, or do I take an apprenticeship, start earning and save for my deposit'?”

With further research from Santander forecasting that house prices will double in the next 15 years, Fletcher revealed this could result in a new trend - ‘multigenerational families’, where adults live with both their children and their parents.

“Unfortunately, the decisions you make as a teenager will become [even] more important,” she concluded.