The Bank of Mum and Dad pays rent costs too
Parents will pay £2.3bn this year helping their children with rent, as the “Bank of Mum and Dad” stretches beyond helping with house deposits. The figures, revealed by Legal & General Investment Management this week, show that parents are also footing the bill for rental fees. It found 10pc of parents had paid for a security deposit, 6pc for moving costs and 5pc for letting agents’ fees.
Dan Batterton, a fund manager at the company, said: “The lack of affordable housing, low wage growth relative to inflation and burdens of student debt mean that many kids can’t even rent somewhere without significant contributions from their family.”
The outlay on rent, along with £6.5bn in mortgage payments, means the Bank of Mum and Dad will spend £8.8bn this year.
Kasper van der Ploeg, 19, is a beneficiary of the Bank of Mum and Dad. He is being supported by his parents while he completes an internship at a central London hotel, as part of a university degree in his native Holland. His parents pay half the £900-a-month rent on his flatshare in Pimlico.
“Rent is so expensive here, particularly in London, if I didn’t have the support from my parents I would be spending every penny I have on rent,” he said.
Alejandro Artacho, the founder of online letting agent Spotahome.com, said rising house prices and rents were pushing more young people to flatshares than they have in the past.