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Bank Of Mum & Dad In Move To Tighten Up Lending Criteria

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Bank of Mum and Dad runs out of money as soaring numbers of young adults struggle to buy their first home

Millions of parents 'unable or unwilling' to help their children, CML says

Deposit demand is major worry for parents and many can't help children

In 2006, 67% of first-time buyers got on housing ladder without financial help from parents - but by last year this figure had collapsed to just 36%

Read more: http://www.dailymail.co.uk/news/article-2336607/Bank-Mum-Dad-runs-money-soaring-numbers-young-adults-struggle-buy-home.html#ixzz2VPKXBBKs

A spokesman for Bank of M&D, speaking from his armchair, continued reading his newspaper but commented: "I can't. Ask your mother."

Edited by inflating

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When you have to go begging or borrowing to family and friends to buy yourself a small first home to live in you know there is something fundamentally wrong with the housing system in this country and the unaffordable total cost of an average home against the average working wage..... ;)

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And another prop to high house prices falls away :)

good - as it should be

see they managed to get 'soaring' and 'collapsed' into the article - daily mail speak for growing and shrinking

comments should be interesting.

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We are becoming a nation of dependency....if it is not the parents and their cash it is the state and their free offerings......sad state of affairs. ;)

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When you have to go begging or borrowing to family and friends to buy yourself a small first home to live in you know there is something fundamentally wrong with the housing system in this country and the unaffordable total cost of an average home against the average working wage..... ;)

When was it ever otherwise?

The odd couple of years in the 1990s, but even then you were expected to have a deposit. At other times, the few who got allocated a council house that wasn't a total slum.

Oh right. Yes, you want a return to the glory days of 2005 and the 125% mortgage to anyone who walks into an estate agent. No BoMD help required there, just an attitude that doesn't get scared of what's going on.

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When was it ever otherwise?

The odd couple of years in the 1990s, but even then you were expected to have a deposit. At other times, the few who got allocated a council house that wasn't a total slum.

Oh right. Yes, you want a return to the glory days of 2005 and the 125% mortgage to anyone who walks into an estate agent. No BoMD help required there, just an attitude that doesn't get scared of what's going on.

Saving 10% of £50k is a lot different to 10% of £250k even taking past lower wages into account......the lower the interest rates fall the higher the prices rise and the harder it is to save the normal deposit and the longer it takes to repay.

http://www.youtube.com/watch?v=6ORjMNIk_qo

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When was it ever otherwise?

The odd couple of years in the 1990s, but even then you were expected to have a deposit. At other times, the few who got allocated a council house that wasn't a total slum.

Oh right. Yes, you want a return to the glory days of 2005 and the 125% mortgage to anyone who walks into an estate agent. No BoMD help required there, just an attitude that doesn't get scared of what's going on.

bought my first house in 1981....we were engaged and saved for 6 months, found a nice house on a nice estate in Chelmsford, got a mortgage at 3 times my salary, and job done.

a 10% deposit on this place was £2300.....I was able to save that easily living at home with a £5000 salary, same with the wife.

we took out a £17K mortgage.

same houses now are £180K.

The deposit would be £18K.....the figures speak for themselves....youd need a salary of OVER £50K to buy the same house in the same ratios as I did.

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It's all a rehash of the same theme, if you are working just now you CANNOT make enough money to support yourself comfortably and build assets to support yourself.

Because credit is so cheap the people with the assets just now simply leverage it up and sit collecting rent in a vicious cycle.

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bought my first house in 1981....we were engaged and saved for 6 months, found a nice house on a nice estate in Chelmsford, got a mortgage at 3 times my salary, and job done.

a 10% deposit on this place was £2300.....I was able to save that easily living at home with a £5000 salary, same with the wife.

There's the key. Living at home. You were raking it in from BoMD.

If I hadn't been paying £220/month rent, I could've saved that too. Not so easy when your income after tax+rent is within £1/week of the dole, and the cost of working (travel, lunch) is a whole lot more than that £1.

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It's all a rehash of the same theme, if you are working just now you CANNOT make enough money to support yourself comfortably and build assets to support yourself.

Because credit is so cheap the people with the assets just now simply leverage it up and sit collecting rent in a vicious cycle.

It's so much easier now ...

I've built up a net worth of about half a million since 2005[1]. While renting a place that would've cost many times my total income at 1980s rates, but today would still leave enough to get by out of national minimum (full-time) wage.

[1] the milestone being when I had to move 'cos my then-landlady gave me the boot in order to sell.

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And another prop to high house prices falls away :)

Looks like we will need the cumulative effect of several props being removed to to make any difference (especially in London)

The article only quotes data from 2006 and 2012 so it would be interesting to see what point the collapse really started and if it is still happening or whether the level of parental support has stabilised.

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Guest eight

When was it ever otherwise?

The odd couple of years in the 1990s, but even then you were expected to have a deposit. At other times, the few who got allocated a council house that wasn't a total slum.

Oh right. Yes, you want a return to the glory days of 2005 and the 125% mortgage to anyone who walks into an estate agent. No BoMD help required there, just an attitude that doesn't get scared of what's going on.

We had no trouble saving up the 5% deposit for our house. Sure, it was hard work, and we had to make sacrifices along the way, but almost before we knew it we had that magic £1500.

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Looks like we will need the cumulative effect of several props being removed to to make any difference (especially in London)

The article only quotes data from 2006 and 2012 so it would be interesting to see what point the collapse really started and if it is still happening or whether the level of parental support has stabilised.

Collapse?

Um, figure it out. To reverse the 'collapse' and revert to 'normal' you need:

  1. Parents to think it's so important for kids to 'get on the ladder' they're prepared to make sacrifices. In other words, HPI.

  2. Easy money for parents to remortgage that family home to raise money for junior.

Without those two things, BoMD's contribution is going to be limited.

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When was it ever otherwise?

The odd couple of years in the 1990s, but even then you were expected to have a deposit. At other times, the few who got allocated a council house that wasn't a total slum.

Oh right. Yes, you want a return to the glory days of 2005 and the 125% mortgage to anyone who walks into an estate agent. No BoMD help required there, just an attitude that doesn't get scared of what's going on.

I think like most of us here, he wants a return to the days when houses cost about 3.5x a single person's income. Hence the 10% or so deposit was quite affordable by the the buyer, without having to resort to borrowing large amounts of money from their family.

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I borrowed 95% ltv for my first home and borrowed the other 5% unsecured from a bank. Happy days.

Happy days because prices went up.

Up sh*t creek if prices have collapsed.....

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I think like most of us here, he wants a return to the days when houses cost about 3.5x a single person's income. Hence the 10% or so deposit was quite affordable by the the buyer, without having to resort to borrowing large amounts of money from their family.

But the Bank of Dumb and Mad is the biggest loser of all. They've squandered the opportunity to cash-out and have re-joined the Ponzi at the bottom with their errant offspring in tow. You'll never see that money again, suckas.

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bought my first house in 1981....we were engaged and saved for 6 months, found a nice house on a nice estate in Chelmsford, got a mortgage at 3 times my salary, and job done.

a 10% deposit on this place was £2300.....I was able to save that easily living at home with a £5000 salary, same with the wife.

we took out a £17K mortgage.

same houses now are £180K.

The deposit would be £18K.....the figures speak for themselves....youd need a salary of OVER £50K to buy the same house in the same ratios as I did.

at the height of the Thatcher depression.

just before Lawson unleashed his housing boom and doubled household debt.

Osborne is determined to repeat his masterstroke.

Avg house price is £166k, so even 10% is just £16k. £8k each for a couple. 5% required under Gidiot's scheme just £8k or £4k each for a couple. That's for an average house. P1ss easy.

Edited by R K

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There have been calls for the government to force greedy parents to lend more to help children on the housing ladder.

'Can't lend, or won't lend?' asked Dave Shark, spokesman for BAPS, the British Association of Property Shills. 'When the government bailed out indebted parents with its wholly admirable permanently low interest rates scheme, it failed to put procedures in place which would compel them to lend what is effectively taxpayers' money to struggling children.'

Nick Twott, Minister for Unearned Incomes, responded in Parliament by annoucing the new 'Studio Start Up Scheme'. The government will match every pound that parents lend to children with 2p of government money to help children take that all important first step on the housing ladder. The scheme, however, will only apply to new build studio flats costing more than £650,000.

In other news, Amanda Holden goes to the shops, Simon Cowell says something or other, a heartwarming disabled boy tells jokes, Britain's Got Sh*te's new line up and Kerry Katona shows off her beach body etc etc etc etc etc

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But the Bank of Dumb and Mad is the biggest loser of all. They've squandered the opportunity to cash-out and have re-joined the Ponzi at the bottom with their errant offspring in tow. You'll never see that money again, suckas.

Presumably they hope that the money will be repaid (not likely) or that the kindness will be repaid (wouldn't count on it). They are just being milked by the financial system casino and not being allowed to walk away with any gains. If they had any sense they'd be demanding lower prices so that their kids could afford housing at realistic prices, instead they are being co-opted into giving back any gains they might have made to keep prices at silly levels and leave their kids saddled with huge amounts of debt.

The bottom line is that at the end of the day, ordinary people generally don't benefit from housing bubbles despite the GBP's obsession with stratospheric property prices as a way to make money.

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But the Bank of Dumb and Mad is the biggest loser of all. They've squandered the opportunity to cash-out and have re-joined the Ponzi at the bottom with their errant offspring in tow. You'll never see that money again, suckas.

Consider it a form of a modern day dowry - except parents have to pay to get rid of all their kids.....

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at the height of the Thatcher depression.

just before Lawson unleashed his housing boom and doubled household debt.

Osborne is determined to repeat his masterstroke.

Avg house price is £166k, so even 10% is just £16k. £8k each for a couple. 5% required under Gidiot's scheme just £8k or £4k each for a couple. That's for an average house. P1ss easy.

Nice and easy for a married couple with two jobs in an "average" area.

If you're single and looking to buy in Bristol, where 1 bed flats go for over £200k, slightly less "easy".

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at the height of the Thatcher depression.

just before Lawson unleashed his housing boom and doubled household debt.

Osborne is determined to repeat his masterstroke.

Avg house price is £166k, so even 10% is just £16k. £8k each for a couple. 5% required under Gidiot's scheme just £8k or £4k each for a couple. That's for an average house. P1ss easy.

Maybe you think £8k is easy, but most workers take home £1000-£1500 a month and would consider having £200 left over at the end of the month something of an achievement. £8k/£200 = 40 months. Oops, lost your job, oops, car is knackered, oops, Christmas/summer holiday, oops, kicked out of rental so have to pay a few hundred in moving costs and letting agent fees (and maybe lose some deposit). Oh yes, and don't forget the student debts, overdrafts, credit card balances etc that most potential FTBs are already carrying.

While you're sitting there smugly enjoying the fact that you can get your hands on a 5 figure sum of ready cash without even blinking, most people in this country are just trying to make all the 2 and 3 figure sums add up.

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  • 241 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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