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One in three first-time buyers relying on the Bank of Mum and Dad

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Record one in three first-time buyers relying on the Bank of Mum and Dad: Trend means ownership is a 'distant dream' for millions on low incomes

http://www.dailymail.co.uk/news/article-4351528/One-three-time-buyers-rely-parents-help.html
 

Yes, I know it's Daily Mail. But it's quite a statistic, particularly given all the recent government's "help".  I'd ignore the spurious accuracy of quoted crazy extrapolations: 

If the economy weakens, the proportion of first-time buyers relying on their parents will stay at the current level until 2025 and then rise to nearly 40 per cent by 2029.
If the economy improves, the proportion of those relying on their families will peak at 39 per cent in 2021/22.

 

As if HPC is not even a possibility, and debt slavery is our certain future, the only variable being just how soon it will happen.

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It's in indie and guardian too. And, yes impossible... 

Home ownership now out of reach for most young people, study finds

http://www.independent.co.uk/news/uk/politics/home-ownership-young-people-study-alan-milburn-government-a7651126.html

Bank of mum and dad' making housing market more unfair, study finds

https://www.theguardian.com/society/2017/mar/27/bank-of-mum-and-dad-housing-market-unfair-study

 

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4 hours ago, AvoidDebt said:

It's in indie and guardian too. And, yes impossible... 

Home ownership now out of reach for most young people, study finds

http://www.independent.co.uk/news/uk/politics/home-ownership-young-people-study-alan-milburn-government-a7651126.html

Bank of mum and dad' making housing market more unfair, study finds

https://www.theguardian.com/society/2017/mar/27/bank-of-mum-and-dad-housing-market-unfair-study

 

If buying is out of reach of youngerpeople then selling is out of reach for older people.

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16 minutes ago, spyguy said:

If buying is out of reach of youngerpeople then selling is out of reach for older people.

Foreign investors, UK-based landlords, REITs, etc. As long as rents allow them to make a profit, or capital growth makes up any shortfall there will always be people looking to invest their money. A weak pound makes UK property look like a steal! 

The UK is now near the bottom of the league table for European home ownership levels, but there is still scope for some big falls...

Rate of home ownership in UK = 63%
Rate of home ownership in Germany = 52%
Rate of home ownership in Switzerland = 45% 

There is plenty of historical precedent for a majority of households in the UK renting.

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Let's face it, the only way 'forward' in this country at the moment for many people is on 'tick' and the threshold for those who require 'tick' is lowering, temporarily of course, before it all goes backwards at warp factor 8

Edited by LiveinHope

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19 minutes ago, Futuroid said:

Foreign investors, UK-based landlords, REITs, etc. As long as rents allow them to make a profit, or capital growth makes up any shortfall there will always be people looking to invest their money. A weak pound makes UK property look like a steal! 

The UK is now near the bottom of the league table for European home ownership levels, but there is still scope for some big falls...

Rate of home ownership in UK = 63%
Rate of home ownership in Germany = 52%
Rate of home ownership in Switzerland = 45% 

There is plenty of historical precedent for a majority of households in the UK renting.

And the world has always turned....

A profit at the renter's expense imo (obviously).

A steal eh.  Many already invested and the drop in £ hits their wealth.  Any uncertainty and we could have a sentiment freeze.  DB puts some fear in there with a view things could still be on the downside for the £ to come.

Germany set up for renting way different than UK.   What's the position with the Swiss?  Do they count their temporary workers?   Homeownership for the privileged long wave HPI, QE protected, top-level pay groups (boss of Credit Suisse pay again this year!!!! and dishing out the wider bonuses big time!), renting for the rest.

Quote

Real movements do not end the day they start.  It takes time to complete the end of a genuine movement. 

It would be simple to run down the list of hundreds of stocks, which, in my time, have been considered gilt-edged investments, and which today are worth little or nothing.  Thus, great investments tumble, and with them the fortunes of so-called conservative investors in the continuous distribution of wealth.

Speculators in stock markets have lost money.  But I believe it is a safe statement that the money lost by speculation alone is small compared with the giganitc sums lost by so-called investors who have let their investments ride.

From my viewpoint, the investors are the big gamblers.  They make a bet, stay with it, and if it goes wrong, they lose it all.  

-Jesse Livermore.  1940: How To Trade

 

Edited by Venger

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26 minutes ago, Futuroid said:

Foreign investors, UK-based landlords, REITs, etc. As long as rents allow them to make a profit, or capital growth makes up any shortfall there will always be people looking to invest their money. A weak pound makes UK property look like a steal! 

The UK is now near the bottom of the league table for European home ownership levels, but there is still scope for some big falls...

Rate of home ownership in UK = 63%
Rate of home ownership in Germany = 52%
Rate of home ownership in Switzerland = 45% 

There is plenty of historical precedent for a majority of households in the UK renting.

Ahhh ,... it at what leverage???

 

Its all fine having a highly leveraged property sector but as IR nomrlaise and IO loans get repriced as briging loans (think IR > 10%) then what?

You are assuming that the UK housing./debt is a serene, gliding swan whereas its really a cranked up debt junkie.

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10 minutes ago, Venger said:

And the world has always turned....

A profit at the renter's expense imo (obviously).

A steal eh.  Many already invested and the drop in £ hits their wealth.  Any uncertainty and we could have a sentiment freeze.  DB puts some fear in there with a view things could still be on the downside for the £ to come.

Germany set up for renting way different than UK.   What's the position with the Swiss?  Do they count their temporary workers?   Homeownership for the privileged long wave HPI, QE protected, top-level pay groups (boss of Credit Suisse pay again this year!!!! and dishing out the wider bonuses big time!), renting for the rest.

 

Our Jesse is a fine read, of a time long, long ago, documenting human stupidity and greed that are very present today.

But even Jesse would not have touched the debt levels that are under propping UK's housing market.

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This just says to me the market has found a way to eliminate mam and dads equity.Given we are very likely to see a 30%+ fall in house prices, that would see the deposit up in smoke.

I actually think its final salary pensions holding things up.The people i know who have done this for grandkids are all ex police/council/teachers etc on final salary pensions.As that pool slowly gets smaller so does the ability to pass down income.Those pensions die with them (or with the spouse).

When i was growing up my mam often slipped my gran a fiver/tenner,pensioners had very little then.Now its the other way around,the workers have little spare and need subs from the pensioners.

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41 minutes ago, spyguy said:

Our Jesse is a fine read, of a time long, long ago, documenting human stupidity and greed that are very present today.

But even Jesse would not have touched the debt levels that are under propping UK's housing market.

Totally agree for the first part. :)  Although towards the end all his money didn't make him happy, sadly.   His book was slightly stilted (feel of 1940) but I enjoyed it.   He admitted the trading mistakes he had made over time almost always came when he broke his own rules, allowing emotion to get involved, as all market participants are prone to.  Wishful thinking the enemy of all of us (in markets).  Clear thinking required.   I like his rules and other thoughts, such as taking profits and being decisive.  If you can sense danger ahead on the railroad tracks, don't remain on the tracks.... you can step off and always get back on later, although many don't.

Picked up his book again recently when a pal asked me for some trading advice.  I am no expert there but more informed than my pal (thanks in part to HPC) who went on to open a Sipp last year after I outlined some of the advantages, and was very happy about getting some tax-relief added to it.

Quote

In consideration of these general trading principles it should be said that too many investors buy or sell impulsively, acquiring their entire line at almost one price.   That is wrong and dangerous.   

And parents on the bomad £ assist with it all.   Although I am not so certain as to the wider debt levels in this multi-trillion-pound housing market, but can see the ballooned valuations (from my perspective at least).  

Keep coming back to just who does all this high-cost housing (which many an owner looks at in terms of a financial asset) actually benefit, and will there be a time when it serves purpose of other market interests to have values slide, perhaps for fresh-lending.   

It's less continuous distribution of wealth at the moment, and more of a severe concentration of wealth, imo.  And wealth helping others buy at high prices.

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13 minutes ago, durhamborn said:

This just says to me the market has found a way to eliminate mam and dads equity.Given we are very likely to see a 30%+ fall in house prices, that would see the deposit up in smoke.

I actually think its final salary pensions holding things up.The people i know who have done this for grandkids are all ex police/council/teachers etc on final salary pensions.As that pool slowly gets smaller so does the ability to pass down income.Those pensions die with them (or with the spouse).

When i was growing up my mam often slipped my gran a fiver/tenner,pensioners had very little then.Now its the other way around,the workers have little spare and need subs from the pensioners.

Makes sense to me.... although I do know of some who refuse to take the offer from the Bomads.  

They prefer to associate with their other friends, totally priced out on the renter-saver side, and say Government must do something (eventually).

I guess every help from Bomad does give the banks/banking system more of a buffer, if and when the market turns.  

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7 hours ago, Drummer said:

Of the people i know, 80+% have had cash from parents or windfall from gparents dying to fund their first home. Very few doing it themselves.

Same here.Also kids living at home into 30's allowing them to save is indirectly helping them as well.

If you are in private renting and hoping to save you don't have much hope

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The irony of ironies is that the Bank of Dumb and Mad has doubled-down on a losing proposition it had the opportunity to cash out of free and clear! How much better for the inter-generational wealth of the family if they'd just restricted themselves to the occasional monthly rental subsidy...

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7 hours ago, Drummer said:

Of the people i know, 80+% have had cash from parents or windfall from gparents dying to fund their first home. Very few doing it themselves.

I'd say that's about right. 1 in 3 seemed like a low estimate to me.

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3 minutes ago, Bhoy said:

I'd say that's about right. 1 in 3 seemed like a low estimate to me.

Ditto

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2 hours ago, Futuroid said:

Foreign investors, UK-based landlords, REITs, etc. As long as rents allow them to make a profit, or capital growth makes up any shortfall there will always be people looking to invest their money. A weak pound makes UK property look like a steal! 

 

Contradiction. I suspect you don't understand why.

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29 minutes ago, Si1 said:

Ditto

I agree - 80% is about right for the people I know who have bought with BoM&D... usually in the region of £70k-£100k+ (greater london)

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52 minutes ago, Venger said:

Makes sense to me.... although I do know of some who refuse to take the offer from the Bomads.  

They prefer to associate with their other friends, totally priced out on the renter-saver side, and say Government must do something (eventually).

I guess every help from Bomad does give the banks/banking system more of a buffer, if and when the market turns.  

Its interesting,but thats probably correct.The more the bankers can get the BOMAD to sub the deposit that gets wiped out in any crash,the better for the banks.The parents would be far better telling their daughters to get pregnant though and get a council house on tax credits and HB.BOMAD can then slip them a few quid every now and again,and once they can right to buy do that.I know several people who have done just that.Also a friend (in his 60s) who bought a 3 bed semi,niece lives in it on benefits.He uses the housing benefit to pay off the mortgage,almost clear now.Left it to her in his will.She is getting a free house paid for by the taxpayer.

Imagine a country where an honest person,who just goes to work every day and pays his tax can buy a home.That used to be the UK.Not now.

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HTB playing a huge part too. Prices up nearly 60% since launch, may have underestimated how toxic this would be. 

Average #London house price in January 2017 = £491,000:
124% higher than in 2004
57% higher than before Government's Help to Buy
#ukhousing

image001.jpg.7d627bc9e21211bc60e63bf41e40b48f.jpg

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3 hours ago, Nabby81 said:

Same here.Also kids living at home into 30's allowing them to save is indirectly helping them as well.

If you are in private renting and hoping to save you don't have much hope

I know someone still at home at 44.

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4 hours ago, durhamborn said:

 

When i was growing up my mam often slipped my gran a fiver/tenner,pensioners had very little then.Now its the other way around,the workers have little spare and need subs from the pensioners.

Just another example of how unbalanced the UK economy has become, private sector workers being taxed heavily to give to pensioners who don't spend it themselves.

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7 minutes ago, Tiger131 said:

Just another example of how unbalanced the UK economy has become, private sector workers being taxed heavily to give to pensioners who don't spend it themselves.

Is the problem tax or artificially high house prices and rents?

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2 minutes ago, iamnumerate said:

Is the problem tax or artificially high house prices and rents?

The problem is that the UK government refuses to change the status quo, whether we are talking about interest rates or paying unfunded (tax payer funded) DB pensions. The UK now operates as a heaven for a narrow band of preferred beneficiaries.

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