'Bank Of Mum And Dad' Helps 80% Of First-Time Buyers

[Vague_Boy]

The socially corrosive effect of high house prices:

 

'The proportion of young first-time buyers who need help from the 'bank of mum and dad' soared to 80 per cent under Labour.

 

The figure is up from just 10 per cent of home buyers aged under 30 in 1995, two years before Tony Blair took New Labour into power.

 

Critics say the figure is a damning legacy of Labour's 13 years in power, which saw a runaway price boom and a failure to build the new homes needed.

 

It is also evidence of a policy by the big banks and building societies to ration home loans only to those who have a large deposit.

Many banks demand stakes of 25 per cent and more, which means first-time buyers cannot hope to get the necessary cash without help from relatives.

 

Labour's house price boom brought a tax bonanza, with a huge increase in stamp duty from families paying inflated prices to move up the property ladder.

 

It also fuelled the bricks and mortar wealth of homeowners, leading to the consumer spending and borrowing that contributed to boom and bust.

 

Now many thousands of middle-aged and older people are having to dip into their savings or borrow against their homes to help their children with a deposit.

 

Many parents do not have the cash, with the result that the average age of a first-time buyer who has not had a hand-out now stands at 38.

 

LibDem Treasury spokesman, Lord Oakeshott said: 'Labour left a terrible housing legacy.

 

'Before Blair and Brown came to power, nine out of ten buyers under 30 could buy their first home with their own deposit.

 

'Now, after Labour's runaway house price boom and failure to build affordable housing, four in five have to rely on the bank of mum and dad.'

 

The difficulties for young buyers have wider consequences for society.

 

Many young couples are putting off having children until they have saved enough to get the keys to their own front door.

 

And, increasingly, adult children are returning to the family home, putting a financial burden on their parents.

 

The dearth of young buyers, who are the lifeblood of a healthy property market, is a problem for all those buying and selling a home.

 

Housing chains cannot form and people cannot move unless young people can afford to buy.

 

Among the reasons that house prices more than doubled under Labour was the fact there was a shortage of new properties.

 

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Watch in slow motion at the magical ability of accrued middle class wealth to disappear back into the void that created it.