'Bank of mum and dad' to fund a quarter of home purchases in 2017

More than a quarter of properties in Britain are purchased thanks to significant help from the so-called "bank of mum and dad", a new report has shown, further highlighting young homebuyers' reliance on their parents.

According to research conducted by economics consultancy Cebr and Legal & General, the amount family and friends were expected to lend to help with a property purchase is forecast to rise from £5bn ($6.45bn) last year to over £6.5bn this year.

The funds are used to provide deposits for some 298,000 mortgages for homes worth a combined £75bn, meaning the "bank of mum and dad" is responsible for approximately 26% of the transactions.

To put the figure into context, that is around the same figure provided by Yorkshire Building Society, Britain's ninth-biggest lender.

The report added that while parents and friends helped approximately 30% of prospective homeowners in 2016, the percentage will surge to 42% this year. The number of purchases set to be funded, however, will be smaller than last year's 306,000, reflecting an overall slowdown in the market.

Meanwhile, the amount of money lent has also increased, rising from an average of £17,500 to £21,600 and, unsurprisingly, those under 30 are the main recipients.

"The 'bank of mum and dad' continues to grow in importance in helping young people take early steps onto the housing ladder," said Legal & General chief executive Nigel Wilson.

"Parents want to help their kids get on in life, and the 'bank of mum and dad' is a testament to their generosity, but it is also a symptom of our broken housing market.

"The UK is experiencing a supply-side crisis in housing – we are simply not building enough houses. We need to build more homes for the young, old and families alike – more quickly and cost effectively."