The insurer is also concerned that 77 per cent of Bomad lenders took no advice about the best way to raise money to help their friend or relative to buy a house. Those who did said they valued the experience, and that it helped them feel more secure in their decision.
This is the third year L&G has published its research into Bomad. Last year it suggested the ‘bank’ could one day face its own funding crisis as house prices continue to rise. It says that while Bomad remains a generous lender, it cannot keep playing such a vital role in the UK housing market indefinitely.
Calling the role played by Bomad as “a depressing indictment of our ongoing housing crisis”, L&G warns: “Its pre-eminence is not desirable, it is not sustainable, and it is not fair – for the parents lending the money or the young people who remain so dependent on it.”
