Bank of Mum and Dad: Over half of Londoners depending on parents’ inheritance to get or stay on the property ladder
Over half of the Londoners who took part in a Zoopla survey admitted they were relying on their parents’ wealth to get them on the property ladder or pay off their mortgage.
The UK-based online estate agent found that seven in ten of those it spoke to planned to pay off their mortgage and move home using inheritance from their parents.
But the survey found only 30 per cent had actually spoken with their parents about how much they were likely to inherit.
Zoopla, which has launched a property inheritance calculator, found the average amount children expected to receive in inheritance was just over £195,00, increasing to £246,000 in London.
Over 60 per cent of those surveyed admitted checking the value of their parent’s house without telling them to estimate what they may inherit.
Daniel Copley, consumer expert at Zoopla said it may seem a “little cheeky”, to expect to inherit but it was “actually really important to have an idea of what may be coming your way in future, so you can plan financially for the long-term, especially with regards to property decisions”.
“The best advice is to have an open and honest conversation with your parents about this, but we know that most people – parents and kids alike – find the subject too difficult or awkward,” added Copley.
For those Brits wanting to avoid broaching the topic with family members, Zoopla’s calculator provides a more accurate estimate of their potential inheritance, using age, number of siblings and the predicted future value of parental homes.
Anyone expecting an inheritance is also urged to consider the impact of inheritance tax.
“Discussing inheritance is really circumstantial”, said Robert Green, director at John D Wood & Co., “for example if property forms part of a family business, it seems reasonable that different generations discuss their plans – often at the discretion of parents or grandparents.”
“The ‘Bank of Mum & Dad’ is also a way of passing on wealth, often by helping with a deposit.”
At the end of January, Zoopla found the UK housing market was off to a ‘slow burn’ start. Forecasts for house prices this year all predict a fall but estimates range widely from six to 12 per cent.