Guest blog: "The Bank of Mum and Dad can't solve this housing crisis"

(77 Posts)
KateMumsnet (MNHQ) Thu 25-Jul-13 13:36:53

This week, the housing charity Shelter published new research which shows that parents pay out a staggering £2 billion each year to help their children into a home of their own.

Here, Shelter's Chief Executive Campbell Robb argues that unless something changes, our children will face a huge struggle to get a stable and affordable place to live.

Are you worried about how your children will be able to afford a home of their own? Let us know what you think here on the thread - and if you blog about it, don't forget to post your URL.


"As a parent I know that doing the best for your kids is always the number one priority. But while you can offer endless amounts of love and support, these days financial support from 'The Bank of Mum and Dad' is becoming almost as important if we want to see them get on in life.

This is increasingly true when it comes to where they'll live when they grow up, and have families of their own. Things have changed massively since I was a young adult. We were able to buy our first home in our 20s, with a deposit of just £4,000. Now, the average deposit is seven times that amount, while house prices have risen so fast over the past 40 years that buying a chicken would cost £51 today if food prices had gone up at the same rate. Saving for a deposit on a first home can take up to three decades in some parts of the country. And at Shelter, I hear first-hand from young people who say that no matter how hard they work or save, they're still priced out.

The knock-on effect of this is that more and more young couples have no choice but to bring up their children in unstable rented housing or put off having kids altogether while they try and save up. Alternatively, they're living at home until their 30s - unable to move out and live independent lives. I'm really worried that unless something changes, the housing situation my daughters will face will be even worse.

None of us wants this for our children, so it's not surprising that more parents are offering to help out. Our new research shows that the number of people relying on help from parents to raise a deposit is rising fast. And we're not talking about a few hundred or even a few thousand pounds: the average contribution was £17,000, which adds up to a staggering £2bn in cash being adding into the housing market each year by parents alone. I don't know about you, but on top of all the other costs parents face I find the prospect of raising that sort of money for even one of my children pretty eye-watering. With the squeeze on family budgets getting tighter, the reality is that the majority of parents simply can't afford it.

All this goes to show that relying on the Bank of Mum and Dad to get young people into a home of their own just isn't a sustainable solution to our housing crisis. If our kids are to even have a chance of a home of their own, the government has to start meeting people half way. This doesn't mean more schemes that help a handful of first time buyers - it means addressing the problem that's at the root of all this: our desperate shortage of housing. After all, this is what's driven house prices up and pushed homeownership further and further out of reach. Yet last year the Bank of Mum and Dad spent more on helping children with deposits than the government spent on building affordable homes.

We have to get a grip on this problem, and we have to do it now. More good quality affordable homes in every community is the only way to make sure our children can get a home of their own. What's more, it would ease pressure on the rental market and bring down housing costs for families at the sharp end of our housing crisis who are fighting a daily battle to keep a roof over their head. These are the people Shelter see's every day, and works hard to stop from becoming homeless. It's all interconnected ' more homes will ensure everyone in our society has a decent, affordable place to live.

The government must join parents now and start investing in our children's futures by building the homes we need."

You can find out more about Shelter's campaign - and use their work use their online calculator to work out how long it will take your children to save for a deposit - over here.

Caster8 Thu 25-Jul-13 14:55:36

Is it all because of the desperate shortage of housing? I am not sure, though I am not an expert.
Loads more houses are single occupancy than they used to be.
There are also a great many houses that are massively under occupied.
Not to mention second homes, that are not occpupied at all for the majority of the year.

I agree that I dont know how it is going to pan out. Uni costs, that is debt as far as I am concerned are going to make the whole issue a whole lot worse. And a lot of jobs that uni graduates want , are jobs that require people to move around the country and abroad, so having a mortgage isnt that great an idea anyway.

timidviper Thu 25-Jul-13 16:00:23

People living longer has changed the balance of things too. I am now in my 50s, by my age my parents and almost all of their friends had lost their parents.

This meant that the houses our grandparents had lived in were available for sale, rent or younger people in the family so there was no housing shortage. If there was any money inherited it boosted the economy as the age group inheriting were often 30s or 40s so were not at the stage where they had all they needed yet so they spent some or all of it.

My friends and I now almost all have one or both parents left who often still live in the family home. While we are all pleased to still have them this is a lot of housing not available to younger families so creating a shortage and pushing up prices. It also means, as older people tend to be more condervative with money, their savings are locked out of the economy so slowing things down.

I'm not complaining about any of this by the way! It just always strikes me that there are more factors than higher divorce rates, etc. Basically we have a finite number of houses and amount of money in the economy and everything is now stretching for more people.

Caster8 Thu 25-Jul-13 16:09:23

Good points timidviper.

I also meant to post that I dont think the hikes in how much houses cost have come about all by themselves, I think that as more households become two income, people wanted bigger, nicer houses. And were willing to spend more money on them. And quite frankly, had more income to borrow against.

Caster8 Thu 25-Jul-13 16:11:17

If we do have an economy crash, we as a country, will find we have far more houses than we "need".
See Ireland.

NatashaBee Thu 25-Jul-13 16:40:17

Very interesting blog. I've thought for a while that my generation is the make or break one for the housing issue in the UK - either the government has to put something in place to provide more affordable housing for people just starting out, or it will reach crisis point by the time my children look to move out. If people can't move into their own homes then they can't necessarily have children and that has a knock on effect of its' own.

The key worker loans and affordable housing projects currently available in the UK are really just a tiny drop in the ocean compared to what's required.

I live in the US at the moment and it's possible to get an FHA mortgage here which is backed by the government. This gives lenders more security when they lend, and they're willing to lend to people with lower credit scores and accept deposits as low as 3.5%. You also get tax breaks when you file your return, the year that you buy a property. Most people here don't struggle to buy a property of some kind even if they're not part of a high earning couple.

Caster8 Thu 25-Jul-13 17:51:25

But NatashaBee. .Even back only as far as the 60's, people were still having plenty of babies, while living with mum and dad!

Badvoc Thu 25-Jul-13 18:07:38

I think historically young couples did live with their parents or pils sometimes until they had young children of their own before they got on the housing ladder.
Back then, of course, houses were larger (unlike now) and there was room for them.
People are living longer, care home fees use up any inheritances and that has a knock on effect too.
There is still a lot of building going on (at least where I live) and it seems to be selling too....not sure how.
We have 3.5 years til our FR on our mortgage ends and god knows what IR will be then!
I hope to be working by then but it's worrying.

sillyoldfool Thu 25-Jul-13 20:16:40

We'll probably be in our 50s by the time we inherit anything from our parents, which as we are renting in a London suburb is realistically the only moment we'll have a chance to buy somewhere. We might then be able to buy somewhere small so that we don't have to try and pay a private rental in our retirement (if such a thing as retirement exists then)
We're then incredibly unlikely to have much to pass on to our children.
We'll never own a family house like my parents and grandparents did.

sillyoldfool Thu 25-Jul-13 20:18:24

And we both have always worked and are graduates and earn a decent wage, not a fortune here, but if we were in the north east say we'd be considered rich.

Caster8 Thu 25-Jul-13 20:40:49

Were houses larger? There were some, but more than enough 2 up 2 down ones, with lots of large families.

Badvoc Thu 25-Jul-13 20:42:24

I think so, yes.
Thatcher abolished the Parker Morris regulations regarding minimum house size.
And now we have a generation being brought up in shoeboxes.
And don't get me started on the lack of storage!

Corygal Thu 25-Jul-13 20:46:59

What happens when Mum&Dad don't pay up?

When your parents are poor, you're guaranteed a life renting. Social mobility? No chance for the British now.

amothersplaceisinthewrong Thu 25-Jul-13 21:10:34

As soon as I inherit, I am giving my kids (now early 20s) whatever I can for a deposit on a house.

Badvoc Thu 25-Jul-13 21:26:46

But how do you know you will inherit anything?
My parents have nothing to leave and pils money will all go on care I'm sure.
So...that's that.
We have 23 years left on our mortgage and dh will be 65 by then.

FrillyMilly Thu 25-Jul-13 22:03:40

I think people's expectations of housing (outside of major citys) has changed. Now people prefer their children not to share rooms whereas my grandparents brought up 4 children in a 3 bed terraced. I also think there is too much emphasis on first time buyers and giving them help. We own a house but are stuck with it due to no equity, struggling to sell and need to save a deposit for another house.

FrillyMilly Thu 25-Jul-13 22:05:53

We also can't get help from the bank of mum and dad, both sets of parents work full time and we are both one of 3. They would all need to be very wealthy to provide 3 children with house deposits.

peteypiranha Thu 25-Jul-13 22:18:05

Frillymilly - Really? Most of my friends have children in 1 or 2 bed flats, and we dont live in a city. I would say thats pretty normal with high rents/mortgages.

sillyoldfool Thu 25-Jul-13 22:26:53

We'll soon have 3 children in a 2 bed flat. Our upstairs neighbours also have 3 kids and 2 bedrooms, I know someone with two kids in a one bed. I know way more people with more children than bedrooms than people who's children all have their own room, which was the norm when I was growing up.

Caster8 Thu 25-Jul-13 22:37:27

See, this is where I disagree with the op. Unless the country starts booming again, I just cant see that there will be a "desperate shortage of housing".

FrillyMilly Thu 25-Jul-13 22:38:26

Maybe it's just where I live (in the north) but as soon as people start having children they want to move from their flats or 2 bed terraced houses in to a 3 bed semi.

Caster8 Thu 25-Jul-13 22:39:07

People are not starting to squash in because of house shortage. But because the cost of housing is getting out of reach of a lot of people. Yes I know about demand and supply, but I dont think it is as simple as that.

peteypiranha Thu 25-Jul-13 22:48:40

I agree with sillyoldfool, when I was younger most children had their own room and lived in houses, whereas now many more families are in flats or sharing with numerous children.

peteypiranha Thu 25-Jul-13 22:50:10

I dont think its shortage as such caster. Its just that most older people are used to living in big houses so keep them on, whereas most young families are in flats or modest homes.

Leithlurker Thu 25-Jul-13 23:32:59

People really do need to get A bigger picture on this.

Firstly for all those too young to remember or from middle class homes who always had "space" just think back to 1946-9 when social house building started. In many cities including London and Glasgow plus many more, the standard that was available was "single ends". For those who do not know that would be as many as 3 generations in just ONE room, with a shared toilet between the entire block of flats. Disease and squalor were rife, in the east end of Glasgow many women lost multiple babies due to lack of basic sanitation and the prevalence of dirt and disease.

Social housing was not and still is not something that only the "deserving" should get. It is part of the drive to have a healthy and happy populace.

The idea that Thatcher had was nothing to do with home ownership, or indeed social mobility it was pure and simple to turn working class voters in to Tory voters as once they were on the housing ladder, conveniently with the rug of social and democratic responsibility withdrawn from them, they would conform to Adam Smith's law and become self centred and protect what they had by voting to benefit themselves.

Roll forward to now and the idea that started with home ownership is now being played out in terms of inheritance, people have come to think that the inheritance being passed down by home ownership is part and parcel of self reliance. Well that just cannot happen becouse economical those that have the houses will need the capitol to fund long term health and social care. They will also be forced to live at home longer instead of going in to local authority care homes or NHS care homes, why? Because the same people who bought their homes also voted in governments who forced councils to privatise care, and open up the NHS to more private providers, their by neatly completing the trap for the home buyer. The only way it would appear to get out of the trap would be to by larger homes, take on higher rates of debt, but in to the life style that comes with economic status based on debt, and hopefully one day be able to sell a home for such a huge amount of money that they become independently wealthy.

In other words people were conned and what we are finding now is that the people paying for the con are the generations who came after Thatcher.

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