Telegraph article - ‘We gave our son £325k to buy a flat – or he would have been stuck renting forever’

[floral2027]

https://archive.ph/JujMC#selection-4141.0-4152.0

It found that this year, 42pc of properties bought by people aged under 55 will have help from the <a class="break-all" href="https://archive.ph/o/JujMC/www.telegraph.co.uk/money/sons-13000-more-bank-mum-dad-daughters/" rel="nofollow" target="_blank">Bank of Mum and Dad,* *equal to 335,000 transactions. By 2026 that will reach £11.3bn.

'His recent clients include Rick and Linda Denton, who rearranged their finances to free up £325,000 to help their 29-year-old son onto the property ladder.
The couple, both 63, were keenly aware that without assistance he and his girlfriend, despite both having full-time professional jobs, would be stuck in expensive rental accommodation forever.

Rick Denton knew his son would be stuck renting forever without financial help
Their gift has enabled their son to buy a two-bedroom flat in Denmark Hill, south London. Their 30-year-old daughter, a lawyer, was given a similar amount to buy her flat in West Hampstead, north London, three years ago.
“We felt it was important to give them a good start in life,” says Rick, who has worked in financial services, and is now an investor, company director, and entrepreneur. “We wanted to make sure they got through university debt free, and could buy a reasonable property in London. We didn’t want them bowed with debt.”
But equally Rick and Linda, who runs her own public relations firm, didn’t want to give their kids a completely free ride. Their son <a class="break-all" href="https://archive.ph/o/JujMC/www.telegraph.co.uk/money/property/mortgages/lloyds-offfers-first-time-buyers-mortgage-5-times-salary/" rel="nofollow" target="_blank">borrowed four times his annual salary to help pay for the rest of the property, with his girlfriend’s wages also factored in.
The couple, who live on Guernsey, were able to finance their contribution by dipping into their investment portfolio.'

Am I the only one who feels that if this continues, the young (who don't have Bank of Mum and Dad) might be totally demotivated (and that the rest of the UK would also become the inheritocracy that London is as there would be a ripple effect).

I did benefit from the inheritocracy too (parents paid my university fees/london rent for 3 years, DH and I had rent free living for 3 years at his mum's house in London), but definitely not to the tune of £325k. I am mystified as to why the son needed such a huge sum to buy a 2 bed flat (I also bought a 2 bed flat in my 20s) and the only other alternative to such a large sum would have been an existence in precarious private rental forever. They also paid his uni fees too so the parental subsidy from age 18 was much more than 325k. Apparently average gift to London FTB (cash gift) is 70k as of 2024.

Newsflash.

We don’t live in an egalitarian world.

Thats fair although I am only 32 and bought when I was 28. I live in the north which is cheaper but it does mean we live nowhere near any family which is the compromise.

I know that. I'm saying that in an ideal world there would be less wealth inequality and less accumulation of vast amounts of inherited wealth.

Did you actually have a point to make or were you just being nippy?

Build affordable homes for ftb.
Cap on rents
More social housing asap.
NO MORE RTB depite what that Angela Rayner woman says.
She benefited and basically reduced social housing stock.

We will be helping our DS when the time comes - as much as we can afford at the time and everything is in trust for him in the event of our deaths.

No, I apologise.

My point is you cannot iron out the inequalities in life - they exist everywhere. And many parents will do anything for their offspring.

You can absolutely reduce inequality. Not eradicate, granted, but there does not have to be growing number of people working and reliant on food banks, living in insecure housing, living in poor health for more years than those who are better off. We can make living conditions better for those who are the least well off and we can tax the richer people in society more, including those who inherit. It shouldn’t be an accepted fact that if you earn the lowest wages that you should suffer.

In the UK we have one of the most unequal societies in the developed world. That is not an accident, it is a choice made by those who are part of the elite who have been leading our country towards ever widening inequality and an increasing concentration of wealth in the few.

Despite the examples here, the data shows that assets like housing are concentrated in the over 55s and that fewer younger people are able to buy a house. It is so much harder and that isn’t a debate.

What people are complaining about is the polarisation of society if wealth just gets passed down the generations.
Same as it has always been.
Go back to early civilization and it was the same then.
Nothing is ever going to change,either nationally or globally.

actually inequality fell post world war 2. Government policies made that possible. In the past if you were poor you died as you couldn't afford medical treatment. If you were born poor, you were very unlikely to buy a home (home ownership rates were 20%) and you couldn't get a professional job. This isn't the case now, not totally anyway, but the home ownership rates make me worry that these gains would be reversed.

@notacooldad I would like to think that we have progressed a bit since early civilization, but it does feel like we are sliding backwards.

House shares are all well and good when younger.

They're not appropriate though for older and/or vulnerable people.

I think if people get a job that’s paying well enough, they find strategies to save. The big issue is buying alone. Thats the big problem for many and two salaries makes life a lot easier! Years ago, most of us bought with two salaries. Friends had gifts from parents 40 plus years ago too. It’s hardly new! It should bring it home more than ever that career and qualifications matter.

The other issue is planning restrictions. We don’t build enough.

This.

As well as the issues you've already mentioned, taxpayer funded schemes like Help to Buy (and Sunak's stamp duty holiday during Covid) inflated house prices. A lot more than some people being given family help to buy.

I just looked at the ONS data for full time private sector male and female workers in London from 2023. DH is top 25% of full time working men, I am top 40% of full time working women. We are probably around top 30% of couples in London but more likely top 20% (combined income 121k) as many couples have part time workers/workers who earn below median wage.

We live in a flat which used to be rented out and before that was lived in by a very poor 90 year old lady who died penniless. When i looked up the census in 1933, the sole inhabitant was a telephonist (probably good job for that time but women were paid much less then and she occupied the flat as a single woman).

if couples like us are living in such properties, where would the poor live. Many on our salary would move outside of London (given we bought after 3 years of rent free living so those without that option would have no choice) and then where would people on the median income live.

The problem with relying on rich or resourced parents is this- it is not a plan for society. Not everyone has rich parents. Not everyone has a mother with a house in London.

@PandaWorld You're completely right.

Including about flatsharing. Although things are worrying for young people (although there's more time for younger people to change their circumstances and/or benefit from government changes to housing policy), it's an absolutely awful situation for older people - those like you over 40. Flat sharing is ok when young but not appropriate when older and/or ill/disabled.

It's already terrible for vulnerable older Londoners. People with health issues or disabilities, who unlike people who can relatively easily move away even if reluctantly, need to be near family and support.

It's also terrible for Londoners and those in nearby areas who need to stay near elderly parents to care for them.

Now that situation is beginning to happen in other parts of the UK too.

Note to a previous poster who thinks simply being from London means "having more opportunities". London has some very high paying jobs. It also has the lowest in the UK. So the highest house prices but lowest wages.

https://www.timeout.com/london/news/the-five-lowest-paid-areas-in-the-uk-are-all-in-london-022424

Like others have said, it's been a problem in and near London for years. Now it's spreading elsewhere - in no small part because Londoners are routinely told to just move - which of course, in addition to being awful for those forced out, spreads the problem elsewhere.

The UK urgently needs more social housing (across the country) and an end to RTB.

the data shows that assets like housing are concentrated in the over 55s and that fewer younger people are able to buy a house. It is so much harder and that isn’t a debate.

That's true - but of no help or consolation for the older people who don't own. Especially the significant minority (nearly 1 million) private renting.

Their situation is worst of any age group. Not only because they're statistically one of the poorest groups of renters (and statistics found many have been in poverty for many years). But also because they're almost a "hidden" group that nobody cares about - because "all older people are doing ok".

Worth remembering that studies have found that inequality within older age groups is the most extreme in society.

The UK urgently needs more social housing - for all in need. Including older people and single households.

MN's answer to adults living at home is always 'You should be ashamed. Get a flatshare. You need to learn to slum it like I did. ' As I say, the cost and age restrictions make it a no go area as well.
It really upset me the last thread on this as people were so judgemental.

My only option will be to move somewhere a hell of a lot cheaper but it's not that easy to do when you are then moving hours away from support, a good outpatient service and the small matter of finding work in a new area which will suit my health needs.

Inequality doesn't have to be eradicated.

(I don't even know if that's possible due to human nature. I think those who genuinely want and would continue to want a truly 100% equal society are a minority, even if they don't admit it to anyone including themselves).

However although there will probably always be "naicer" areas and nicer or bigger homes for some - not everyone will be able to afford to live in a chocolate box village - it absolutely is possible to easily ensure everybody has the most essential needs met. Including safe and affordable housing where they need to live.

A major way to achieve that is more social housing (across the UK - and for all household sizes including single ones), ending RTB.

the home ownership rates make me worry that these gains would be reversed.

That shouldn't be a problem. It's nice to own but not a need. The need is more social housing.

What really gets me is this.

People wanting to intervene in others lives, and their choices. Stay out of it - live and let live. Get on with your own life.

Absolutely this.

Especially as in addition to the very important reasons you've noted, there's a requirement to have a local connection to be eligible for social housing.

Also one of the reasons why the problem (that has been an issue in London and nearby areas for years) is spreading elsewhere...is because of people being forced out of London and other areas where housing has become unaffordable... So spreading the problem to more parts of the country.

Social cleansing is an appalling thing fullstop, but it also has consequences for the areas people are socially cleansed to.

Glad to hear it! Hope it goes far enough!

I wouldn’t say that untypical of a Telegraph reader, and if you have so much money you can spare £350k AND you don’t think that kind of gifting will turn your kids into a-holes then go for it!

Yet most people on MN judge so heavily even when I state factual truths like that.

Not everyone is privileged enough to come into family money or have a high earning partner.

it isn't so easy because your choices are also a product of your circumstances.

Most people are reliant on NHS healthcare and the funding for that comes from the younger generations. If many people have no incentive to work because they are better off living with parents (and picking up the odd shift at tesco for some spending money) if they are not on track to be in the top deciles, then that has huge ramifications for our ability to fund our pensions and healthcare. We can only import so many immigrants (who have the ability to be net contributors).

Logically in such a situation, the house prices should fall and become more affordable, but though london salaries have barely risen in real terms in the last 14 years, house prices definitely have and a lot of this is funded through generational wealth and overseas wealth. We also have the largest number of vacancies for healthcare workers and other essential workers.

Being an inheritocracy harms everyone, including those who have the means unless they have decided to opt out of nhs healthcare.

As a side note, only rich people having the ability to buy property and start families also ultimately would lead to what we call overproduction of elites. Peter Turchin used to study insects, has a theory that a wealth pump which leads to wealth inequality and an overproduction of elites leads to social instability and currently America is going through this, hence characters like Trump/Vance who use high risk strategies to overturn the current political ruling class.

'The social pyramid has grown top heavy,” he explains, with rich families and top universities churning out more wealthy graduates than the system can accommodate. To illustrate this, Turchin describes a game of musical chairs with a twist. There’s always been a limited number of powerful positions, be they senator, governor, supreme court justice or media mogul. In an era of elite overproduction, rather than chairs being taken away whenever the music stops, the number of competitors increases instead. Before you know it, there are far more people than can realistically attain high office. Fights break out. Norms (and chairs) are overturned as “elite aspirants” – those who have been brought up in the expectation of a say in how things are run – turn into counter-elites, prepared to smash the system to get their way. This isn’t just a US problem, by the way; Turchin says that Britain is on a similar trajectory. In fact, among OECD countries, it’s next in line. Germany is further behind, but also on the same “slippery slope”.'

If the vast majority of children born in the next 10 years are the children of rich families/those earning a 6 digit household income or children of the poor (in council housing), then the expectations of these children would be higher and their parents would tend to want them to follow in their footsteps to be upper middle class professional workers. There unfortunately are only that many CEO positions senior lawyer positions consultant doctor positions, audit partner positions. In the past UK had an empire so exported its restless upper middle classes to the colonies where they could feel they were middle class and live cheaply. This no longer exists. This was described in 'the road to wigan pier'.

' It was this that explained the attraction of India (more recently Kenya, Nigeria, etc.) for the lower-upper-middle class. The people who went there as soldiers and officials did not go there to make money, for a soldier or an official does not want money; they went there because in India, with cheap horses, free shooting, and hordes of black servants, it was so easy to play at being a gentleman.'

https://www.niskanencenter.org/are-we-overproducing-elites-and-instability/

https://www.theguardian.com/books/2023/may/28/end-times-by-peter-turchin-review-elites-counter-elites-and-path-of-political-disintegration-can-we-identify-cyclical-trends-in-narrative-of-human-hope-and-failure

@Windchimesandsong I completely agree.

it is important to remember - if ordinary working people aren’t buying the houses then who is - the assets are still there and still exist! They are now just concentrated in a smaller pool of people who are becoming increasingly wealthy.