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Bruce Banner

Legal And General - The Bank Of Mum And Dad.

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BBC News are running this today.... Legal and General say new mortgage products are necessary.

Don’t hold your breath waiting for a correction. House prices in the UK continued to rise in 2015 and will be higher still next year. The average house price in England passed £300,000 for the first time in October 2015, and at the end of January 2016 stood at £306,000 up 8.6% on the year. In London, average prices were a record £551,000, up 10.8%.iv

This continues a long-term trend. London values have more than tripled in two decades, up 358%.v In the UK on average, with the exception of the financial crisis, the past 15 years have seen rapid, consistent growth in house prices.

Few expect it to change. Changes to buy-to-let tax relief and stamp duty announced by the Chancellor in November 2015 – blamed for a rush in the market in the first quarter of this year vi – will have only limited impact, say experts. Of 88 economists questioned by the Financial Times to assess the impact of government policies, none expected a general fall in prices.vii

As Nicholas Barr, Professor of Public Economics at the London School of Economics put it: “The core problem is too few houses. Government policy is doing little more than making a small dent in the problem.”

The Cebr forecasts house prices in the UK will grow 4.9% in 2016,viii with slightly slower growth in following years, but still well above inflation of 0.3%.

http://www.legalandgeneral.com/articles/family/bank-of-mum-and-dad.html

http://www.legalandgeneral.com/_resources/pdfs/insurance/The-bank-of-mum-and-dad-full-report.PDF

Edited by Bruce Banner

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Seems the answer to the housing crisis is to promote products which make legal and general and other banking and insurance firms make bigger profits over the long term.

And what happens if you mum and dad don't own their home. Is this what we have come to - if you mum and dad don't own a big house you never will.

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From the report:

Without much greater willingness to engage in options such as releasing equity, the next generation of parents could run into liquidity issues when the time comes to help their own children onto the housing ladder.

Hey, don't L&G offer equity release products? Odd coincidence.

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People 'releasing equity' from their paid for homes to funnel into their kids purchases is surely ponzi 101.

It's one thing to chuck a bunch of 'savings' at the children - as much as I grit my teeth (and it's happening very close to home) and think it's a flipping joke that's what things have come to - at least that's just a prop limited to folks with surplus liquidity. Some may argue it's the same thing but...

...This new recycling is a bankers/financial institutions wet dream realised. Ah well, carry on.

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According to a topic on BBC Breakfast today there are some people lending to other people's children to help them get on the "property ladder". We're definitely missing a trick here. How about employers offering to "help" with loans/ peer-to-peer lending for property deposits etc etc. Then the sky's the limit for house prices.

(PS I hope none of those people in banks/insurance companies etc are reading this as I don't want to give them ideas)

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According to a topic on BBC Breakfast today there are some people lending to other people's children to help them get on the "property ladder". We're definitely missing a trick here. How about employers offering to "help" with loans/ peer-to-peer lending for property deposits etc etc. Then the sky's the limit for house prices.

(PS I hope none of those people in banks/insurance companies etc are reading this as I don't want to give them ideas)

I agree we are missing a trick...happy to lend 50k to any aspiring home purchaser at the low, low rate of 7% p/a.

Of course, if I was a 'homeowner' slavishly trying to defend my equity, this would be exactly the correct strategy until the music stops and you sell now, sell everything.

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The 120% mortgage was an imaginative lending vehicle.

The banker crooks need to get locked up en-masse.

They are being allowed to rob us all blind...supported by the people who profess to work for us ( once every 5 years ).

it's crazy.

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@landg_uk http://www.legalandgeneral.com/articles/family/bank-of-mum-and-dad.html Isnt this just a PONZI scheme where BOMAD reinvesting their winnings to support their house prices ?

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@landg_uk ...Arent PONZI schemes illegal ? Maybe the fraud squad need to start looking at this ?

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According to a topic on BBC Breakfast today there are some people lending to other people's children to help them get on the "property ladder". We're definitely missing a trick here. How about employers offering to "help" with loans/ peer-to-peer lending for property deposits etc etc. Then the sky's the limit for house prices.

(PS I hope none of those people in banks/insurance companies etc are reading this as I don't want to give them ideas)

Mark Carney should really give thought to the boe directly supporting this with a special scheme.

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According to a topic on BBC Breakfast today there are some people lending to other people's children to help them get on the "property ladder". We're definitely missing a trick here. How about employers offering to "help" with loans/ peer-to-peer lending for property deposits etc etc. Then the sky's the limit for house prices.

(PS I hope none of those people in banks/insurance companies etc are reading this as I don't want to give them ideas)

Strictly speaking, given the banks' role as intermediaries between depositors and savers, for every tenner you have on deposit with a UK bank, about £7 has been lent on as a mortgage, and about 15% of that £7, so about £1, has been lent on to a buy-to-let borrower.

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Banks want to lend into a bubble without taking any risk. That sounds a fantastic deal.

They're just trying to 'help' hard working young people afford a house.

Just like the government with their fantastic 'Help the Banks to Buy' scheme.

It's great that all those wonderful people in the establishment want to help the common folk, I say. :D

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They're just trying to 'help' hard working young people afford a house.

Just like the government with their fantastic 'Help the Banks to Buy' scheme.

It's great that all those wonderful people in the establishment want to help the common folk, I say. :D

...and as a nice side effect...it makes them immensely wealthy.

Aint pyramid scams just dandy

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As Nicholas Barr, Professor of Public Economics at the London School of Economics put it: “The core problem is too few houses. Government policy is doing little more than making a small dent in the problem.”

The fact that this 'expert' thinks the govt. policies are putting a dent in the problem at all tell me he knows f all.

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What could possibly go wrong with "lending into a bubble", lol?

What could possibly go wrong with

PREDATORY LIAR LOANS

THE KEY to the HPI Scandal & THE FUEL for the Greatest Ever Pyramid/Ponzi Scam in All History.

Edited by eric pebble

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