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Tempus

Bank Of Mum And Dad Is Now Paying The Rent, Too

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Not that anyone here will be surprised.

"The Bank of Mum and Dad – the lender of last resort for their grown-up children unable to afford a deposit to buy a home – has moved into the private rentals market. The country’s housing crisis has become so acute that parents are now having to subsidise their children’s rent to the tune of £1bn a year."

https://www.theguardian.com/money/2016/jul/16/bank-mum-dad-generation-rent

The BTLers will be gloating as they prepare to up the rents to cover tax changes, knowing that BOMAD will pay the increase.

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The 'boomers' have finite wealth to be drained and will be needing to spend more of what they have to support themselves as they get older and older - probably within a decade and a half there won't be anything more to be squeezed out of them.

It just keeps the plates spinning that much longer I suppose.

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Not that anyone here will be surprised.

"The Bank of Mum and Dad – the lender of last resort for their grown-up children unable to afford a deposit to buy a home – has moved into the private rentals market. The country’s housing crisis has become so acute that parents are now having to subsidise their children’s rent to the tune of £1bn a year."

https://www.theguardian.com/money/2016/jul/16/bank-mum-dad-generation-rent

The BTLers will be gloating as they prepare to up the rents to cover tax changes, knowing that BOMAD will pay the increase.

If they're gloating at this then they're certainly not very astute. If your tenants need external support just to pay the rent, then your people farm is on the verge of collapse.

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The modern circle of life.

Wouldn't suprise me if there is a whole load of buy to letters in one massive circle jerk playing pass the parcel with each other's rental income via their kids, scratching their heads at it all wondering why they don't have grandkids yet.

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The modern circle of life.

Wouldn't suprise me if there is a whole load of buy to letters in one massive circle jerk playing pass the parcel with each other's rental income via their kids, scratching their heads at it all wondering why they don't have grandkids yet.

Haha even worse... Know someone who's btl parents cut the middle man and now letting kiddies live for free in one of their btls

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There is a simple solution cut LHA. That should bring down rents.Is there a political will to to that?

54% is a big number. What if they decide to migrate/give up working?

Edited by Fairyland

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Haha even worse... Know someone who's btl parents cut the middle man and now letting kiddies live for free in one of their btls

And to top that, I remember a money aging expert thread where the chap was asking for advice on renting out his buy to let to his son who would then claim housing benefit. I wish I could find that thread....truly mindblowing the support he got on ripping off the state.

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Thanks for making me angry on a Sunday!

In most council areas I believe they won't pay out on benefits claims of this nature.

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My initial reaction was 'WTF is wrong with these people', but on a second thought I don't think there would be anything illegitimate about it. If HB is in place, I don't think you should be put in disadvantage for choosing specific landlord over another, neither should the LL be limited in his choice of tenants. It's not like he's getting any extra money over what he'd be due with any other tenant. It's HB in general that should be reworked or scrapped.

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Hyperinflating away the cash and pension wealth of the boomers is the solution. I have stressed this many times over: HI is the solution, not the/a problem.

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My initial reaction was 'WTF is wrong with these people', but on a second thought I don't think there would be anything illegitimate about it. If HB is in place, I don't think you should be put in disadvantage for choosing specific landlord over another, neither should the LL be limited in his choice of tenants. It's not like he's getting any extra money over what he'd be due with any other tenant. It's HB in general that should be reworked or scrapped.

To some extent yes - hb tenants are fungible, granted. And your final point gets to the crux of the issue - hb itself.

However in the system as it stands, the way I see it is this:

He brought that person into the world. It doesn't matter how old the offspring is, if you're sitting on an asset that you could potentially sell to aid them, you do it. Or you subsidise them by hook or by crook and you economise. No 'its my pension innit' and get the taxpayer to help. This is parasite by proxy. It's abhorrent.

I have way less of a problem with the title of the topic - that's just highlighting an effect of the problem that's been created....oldies having to bung their kids a few quid probably helps them slowly realise the clusterf*ck were now in.

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Yes, abstracting the son to a generic tenant as justification is a step too far - if we ignore all the other aggravating things about BTL / HB.

It's like saying humping your mum is OK because it's just a vagina. Ergo, BTL = mother******ers.

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Yes, abstracting the son to a generic tenant as justification is a step too far - if we ignore all the other aggravating things about BTL / HB.

It's like saying humping your mum is OK because it's just a vagina. Ergo, BTL = mother******ers.

Perfectly put.

The wide scale moral hazard this type of situation could lead to is also a factor.

Technically, if people got wind of this as a possibility we could see *mass* purchases and arrangements like this. Where does it end?

Given the deprivation of capital rules, if I decided now that a tesla, a Honda RC30 and an E-type jag might be nice and thus get rid of my savings, bung all my income into a sipp and get Dad to buy himself a interest only buy to let and do the same thing in about a years time.

Strangely I don't think that's a good thing to do.

Edited by Frugal Git

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And to top that, I remember a money aging expert thread where the chap was asking for advice on renting out his buy to let to his son who would then claim housing benefit. I wish I could find that thread....truly mindblowing the support he got on ripping off the state.

As I recall they wont pay housing benefit to someone renting from a connected person.

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I know a girl that rents to her sister who's a dole scrounger. The girl I know get cheap accommodation in brum as she's a teacher in Birmingham.

Her house is in Gloucestershire.

I can understand why she done this. Staying in Birmingham is not for long term and a family member would not trash the place unlike standard dole scrounger

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Housing benefit payments to related party rentals are permitted - provided it's not shown to be a contrived rental. Basically, if Ms X is already getting HB somewhere and then moves into her dad's BTL, she'll probably be paid OK. Of course, even if she puts in a first claim for a BTL that her dad has bought specifically for HB rinsing (ie totally contrived) there are very few checks.

My most recent shocker (as in what utter mugs tax payers are) is someone I know who's just bought a prime central London flat under Right to Buy. Fair enough, you may say. But she already owns outright a really nice place in prime holiday Cornwall - worth a mint. All above board and legit. That's the asset side of her life - the income side makes you weep as well; single mum, part-time public sector job, tax-credits.

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Haha even worse... Know someone who's btl parents cut the middle man and now letting kiddies live for free in one of their btls

House next door to me is like that, except it's the grandparents subsidising the living expenses of the little darlings, guess they will eventually make some sort of arrangement to own the place at a knockdown price.

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.

My most recent shocker (as in what utter mugs tax payers are) is someone I know who's just bought a prime central London flat under Right to Buy. Fair enough, you may say. But she already owns outright a really nice place in prime holiday Cornwall - worth a mint. All above board and legit. That's the asset side of her life - the income side makes you weep as well; single mum, part-time public sector job, tax-credits.

Owning a whole other property should disqualify her for tax credits shouldn't it?

Unless it's highly leveraged as a tax dodge. In which case the new btl tax changes will catch her out.

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Perfectly put.

The wide scale moral hazard this type of situation could lead to is also a factor.

Technically, if people got wind of this as a possibility we could see *mass* purchases and arrangements like this. Where does it end?

Given the deprivation of capital rules, if I decided now that a tesla, a Honda RC30 and an E-type jag might be nice and thus get rid of my savings, bung all my income into a sipp and get Dad to buy himself a interest only buy to let and do the same thing in about a years time.

Strangely I don't think that's a good thing to do.

Good taste in cars and bike :)

Yes, this situation is a landlord subsidy with the added benefit to "sort out" the tenant child as well. the perfect circle. ******ing disgusting.

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