Tuesday, May 02, 2017

BOMAD Rising

Telegraph: Bank of Mum and Dad now equivalent to the ninth biggest mortgage lender, paying out £6.5bn

Parents now fund more than a quarter of house purchases as young people and first-time buyers struggle increasingly to get on the housing ladder. The Bank of Mum and Dad has become the equivalent of the ninth-biggest mortgage lender in the UK, up from 10th place last year, making it bigger than Clydesdale Bank in the mortgage market.

Posted by jack c @ 11:09 AM (2353 views) Add Comment

2 Comments

1. icarus said...

First word of the first comment on the article is 'Ponzi'.

Fictitious value (try realising the five trillion that UK property is "worth") fuels the equity release that's used to produce the new money coming in at the bottom that's required to prop up the fiction. And the equity release parents provide the deposits that underwrite the banks' risk in lending to people who cannot afford to buy in the absence of parental help. CP himself couldn't have thunk up a better scheme.

Wednesday, May 3, 2017 09:09PM Report Comment
 

2. mombers said...

If you get a soft loan of more than £5k from your employer, it's classed as a benefit in kind and hammered with up to 53% income tax and national insurance. Outright gifts of unlimited amounts from your parents, never mind soft loans, are exempt from tax unless they die within 7 years. Even then, it's 0% on the first £1m for a couple (only for housing lottery winners though, £650k for those with other assets????). How about an option at the beginning of your working life: first £325k earned income is tax free, then normal tax rates apply. But your estate gets taxed at 40% from £0 instead of £325k. Or if you want to get your tax benefit when you die, you don't get a lifetime earned income nil rate band. Even out the playing field between those who work for income and those who get given it.
*disclaimer - moderate Bank of Mum and Dad beneficiary...

Thursday, May 4, 2017 12:21PM Report Comment
 

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