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BOMAD funds 26% of sales

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http://news.sky.com/story/bank-of-mum-and-dad-funding-a-quarter-of-home-purchases-report-10860121?dcmp=snt-sf-twitter

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The "bank of mum and dad" now helps fund more than a quarter of property purchases, according to new research.

Figures from Legal & General and economics consultancy Cebr suggest young homebuyers are increasingly reliant on their parents, with family and friends expected to lend more than £6.5bn in 2017 for purchases, up from £5bn last year.

The money is helping to provide deposits for more than 298,000 mortgages to help buy homes worth £75bn, and means the bank of mum and dad is involved in 26% of transactions.

 

I'm 35 I don't know anyone who hasn't had parental help buying , most extreme example the mum and dad ( serperated ) both put in and then had the Gran top it up .

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8 minutes ago, Nabby81 said:

http://news.sky.com/story/bank-of-mum-and-dad-funding-a-quarter-of-home-purchases-report-10860121?dcmp=snt-sf-twitter

I'm 35 I don't know anyone who hasn't had parental help buying , most extreme example the mum and dad ( serperated ) both put in and then had the Gran top it up .

Does BOMAD mean the parents remortgage their mortgage free house or do they just tend to have spare cash from plum pensions and investments?

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1 hour ago, Nabby81 said:

http://news.sky.com/story/bank-of-mum-and-dad-funding-a-quarter-of-home-purchases-report-10860121?dcmp=snt-sf-twitter

I'm 35 I don't know anyone who hasn't had parental help buying , most extreme example the mum and dad ( serperated ) both put in and then had the Gran top it up .

My experience is similar. I'm sick of competing with people dished £30k+ by their parents.

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58 minutes ago, fru-gal said:

Does BOMAD mean the parents remortgage their mortgage free house or do they just tend to have spare cash from plum pensions and investments?

I believe re mortgaging is the primary route, taking gains from the top of the pyramid to finance new entrants at the bottom.

Just like a Ponzi scheme which is about to collapse.

Edited by Lord D'arcy Pew
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Yeah I think all my peers/friends have had BOMAD.

Lucky for them.

My mum asked me the other day if I aspired to more (I own a small terrace house with a small mortgage).

Of course I said - but don't want the debt servitude.

She hasn't got a clue.

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Which means that the parents are going to be pretty much cleaned out when they need money to support themselves in their elder years.

Still, I'm sure that their kids will take them in and look after them....... :huh:

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24 minutes ago, GrizzlyDave said:

Yeah I think all my peers/friends have had BOMAD.

Lucky for them.

My mum asked me the other day if I aspired to more (I own a small terrace house with a small mortgage).

Of course I said - but don't want the debt servitude.

She hasn't got a clue.

Suggest to her she reads The Grapes of Wrath.

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53 minutes ago, Sour Mash said:

Which means that the parents are going to be pretty much cleaned out when they need money to support themselves in their elder years.

Still, I'm sure that their kids will take them in and look after them....... :huh:

The parents will still have their house and a charge will be put on that to pay for a care home or nursing if required. So basically the kids get their inheritance early .

How many generations can this go on for ? 80 year olds , leave £ to 50+ year olds who give deposits to 30 year olds . Works  well for only children ....

 

 

 

 

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But this is impossible, many of the more vocal maybe even combative posters have told me, that people with access to such cash are too small to have any effect. They also have claimed a the myth of reclass lending hasn't occured post 2008 despite there being more mortgages take out with greater than 90% LTV.

Put it this way there is still alot of money flowing around into property morgage rates are low and lending is pretty loose still and people are still seeing property as a good investment. Parents (both mine, inlaws and other friends) seem happy to fund home purchases because you cant loose on bricks and Mortar, in fact they openly say how good their decision was to fund their childs house compared to mine because I would have to pay x + 20% now for their house and I've paid rent in that time. Even my own parents mention (to others) that I have money available from them to help with the deposit so others can see it is my decision not to have brought and they they have encouraged me to have done.

It's the problem with being outside the heard you are either a genius if it works out and there is a HPC (and trust me I will rub it in) or a complete idiot who cant see what everyone (the rest of the heard) else can. Having come from the south east i am definately in the loosing group at the moment so keeping my head down discussing houses at family and friends get togethers.

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3 minutes ago, chicker said:

The parents will still have their house and a charge will be put on that to pay for a care home or nursing if required. So basically the kids get their inheritance early .

How many generations can this go on for ? 80 year olds , leave £ to 50+ year olds who give deposits to 30 year olds . Works  well for only children ....

 

 

 

 

As long as the prices go up and the rates stay low.

They are giving made up money to the bottom of the pyramid just as another user posted.

This is a magnification effect on the way up and will have one on the way down.

Nobody would give two shits if people helped their kids and property was 3-4 salary or 10/15 times yearly rent.

 

 

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1 hour ago, chicker said:

I'm surprised it's not a higher percentage, especially in the SE .

It's only for FTB under 35. So BTL (still some transactions even if they dropped) and people upsizing are not part of this equation.

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3 minutes ago, Freki said:

It's only for FTB under 35. So BTL (still some transactions even if they dropped) and people upsizing are not part of this equation.

Ok but I'm still surprised this low. 

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14 minutes ago, Freki said:

It's only for FTB under 35. So BTL (still some transactions even if they dropped) and people upsizing are not part of this equation.

Also its not including inheritance either....

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1 hour ago, Lord D'arcy Pew said:

Suggest to her she reads The Grapes of Wrath.

I read The Grapes of Wrath whilst staying in Calcutta...and whilst written about the USA I still think it is the best analysis of poverty in modern literature.

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10 minutes ago, stuckin2up2down said:

30k is nothing to most boomers to give away. Many have fortunes piled up in their savings accounts as they cant spend it quick enough!

All these generous pensions are to blame.

yes this is what I have seen with many of my peers families...many boomers own >£0.5m houses outright AND have inherited similar amounts from grandparents AND have savings and investments AND have generous pensions...the younger generation however can hardly afford to live from day to day.

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4 minutes ago, Wayward said:

yes this is what I have seen with many of my peers families...many boomers own >£0.5m houses outright AND have inherited similar amounts from grandparents AND have savings and investments AND have generous pensions...the younger generation however can hardly afford to live from day to day.

Yep I know many, but don't even talk about taking away their free bus pass, winter fuel allowance or triple lock or they will get furious.

I will never pay much tax in this country ever again. Feck em.

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There's a big difference between families.

My better half's family:

Both parents born into working class families of 3-4 kids. Both elevated themselves to middle class through grammar school and free university education. A total of 7 in her generation, 2 siblings.

Grandparents both sides own or owned houses, but no significant additional wealth. At most she's looking at inheriting 1/3rd of parental wealth in later life, parents will inherit 1/3rd and 1/4 each. No real capacity to go mad with the BOMAD now, no massive inheritance coming later.

My family:

Both of my parents were only children. One parent elevated from working class to middle class down the grammer/free uni route. But, the other side of the family is both small numbers every generation, and solidly middle class for several generations. Consequently one set of grandparents were millionaires, and parents inherited the lot minus what came straight to me and one sibling. We will also inherit most of the rest eventually. Parents are already planning this, are not extravagant, own home, and Dad has a 50% final salary pension.

Consequently, I have already been "BOMADed" out of all comparison to whatever my partner will ever inherit with a load more to come in later life. I also (at the moment) have a solid income and an aversion to debt and excessive consumption. Should we have kids, it will be 2 at most and provided I inherit & my health & career remain stable for the next 15 years, they too will be well set up.

I think this is a pretty rubbish situation for the other 6 kids in my partners generation, and their kids too if I'm honest. It's not that passing down wealth is bad, it's the inability to acquire a decent owned home and a financially worry free retirement without it unless you have a top ~10% household income. My own parents had little financial help in their working lives, and managed it themselves with very ordinary public sector careers. That chance appears to have been taken away from many under 40 and all under 25 as things stand.

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What about people in their 80s sitting on fortunes and well-aware of what's happening but don't give a jot about their children/grandchildren struggling?  They were the cruise generation in their 60s and 70s and are now busy spending their wealth on their own care/cleaners/gardeners etc living in places wheich they can't manage but see no reason to downsize.  There are many selfish in that generation too:(

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As much I am an advocate of generation inequality, I don't like to put the blame on their behaviours but more on the lack of nudges by the government to change those behaviours.

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