Should we be worried about over-reliance on the Bank of Mum and Dad in the property market?

Helen Morrissey, personal finance specialist at Royal London, says YES.

It is great if parents are able to help their children, but there is a concern that receiving help from family is becoming the only way for young people to buy their own home. This means that those unable to access this support find themselves locked out of purchasing a property.

Moreover, parents should ensure that they do not leave themselves short of money by loaning funds to their children.

Redundancy and ill health can have a major impact on your financial situation, and what seemed like an affordable amount to gift or lend can suddenly become more problematic. This can place huge stress on the parent-child relationship.

Reliance on the Bank of Mum and Dad does nothing to solve the overall housing crisis.

What we need is wider policy reform to increase the number of affordable homes, so home ownership becomes an achievable objective for more young people, regardless of their parents’ financial situation.

Read more: Half a million baby boomers hit by UK housing crisis

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says NO.

It is natural that parents want to help their offspring whenever and as much as possible – so the Bank of Mum and Dad isn’t closing any time soon, and nor should it.

The question is how to gift money in a way that encourages children to be financially responsible, rather than relying on handouts.

Parents can use this as an opportunity not just to give their children a leg up onto the property ladder, but to build the kind of financial habits that will stand them in good stead throughout their adult life.

Junior Isas, for example, allow parents to save and invest tax-free for their kids from birth – they can not only build a nest egg, but also showcase the value of regular saving, the importance of investing, and the transformative effect of compound interest.

The more that children develop sensible financial habits early on, the less they will need to rely on anyone else in the future, increasing stability both for their own lives, and for the economy in general.

Read more: Uh-oh millennials: London is now the second-priciest city for avocados

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