From the BBC:
Parents spend so much money to get their children onto the housing ladder that they are now among the biggest lenders in the UK, a survey suggests.
The average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year, according to Legal & General (L&G).
Collectively parents have given £6.3bn, high enough to rank the bank of mom and dad 10th if it was a mortgage lender. Clydesdale Bank, the UK's 10th largest mortgage lender lent £5bn last year...
L&G's research, based on a poll of 1,600 parents, found more than half were using cash to help their children, but others were withdrawing money from their pensions or said they would consider using equity release from their homes.
Is it just me, or has the world gone completely mad?
Older generations, who own most of the housing, are taking out second mortgages to give their children money to buy housing?
At the level of an individual family, this might make a warped sort of sense, but collectively is is a massive Ponzi/pyramid scheme. Old people borrow money to lend it to young people so that they can sell their assets to young people for inflated prices, there being no net gain to anybody apart from banks and large landowners.
I also wonder how many of those who borrow from BOMAD disclose the fact on their mortgage applications...
Debate Magazine
