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More graduates turn to 'Bank of Mum and Dad'

Date 20 Apr 2007
Author The Editor

The number of graduates borrowing from parents to fund a property purchase has doubled in the past 10 years, a Scottish Widows survey suggests. In 1996, 9% of graduates buying a home borrowed money from their parents, but by 2006 this had risen to 18%. Overall, more than £2bn has been lent by UK parents over the past 10 years. The average parental loan is £12,188.

Parents are increasingly asking that loans to children to buy a home are repaid. However, parents are not adopting hard-nosed tactics – one in six do not set a deadline for repayment of the loan. Nearly four out of 10 graduates said they would have no chance of buying property without a loan from their parents.

Richard Clark, Scottish Widows spokesman, said: "It is clear that it is becoming more and more difficult for graduates to get on the property ladder without any assistance. “Even graduates who have been working for several years are forced to borrow money. “Some of these loans are leaving the bank of mum and dad empty.”

Many graduates are also relying on parents for a roof over their heads after they leave university. Scottish Widows found that nearly one in five graduates move back in with parents after university.

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