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Never mind the first-timers, what about last-timers?

The kids are revolting.

Well, sometimes they are but these days they are mostly actively engaging in revolt rather than just being silent, misunderstood and slothful.

Because they are a bit older now, they want a home but as we all now know the only way many of the so-called Generation X age group (19-35) will get on the housing ladder is if their parents help them out.

And this, again as we all now know, is called BoMaD – the Bank of Mum and Dad. While our latest research shows the vast majority of parents who are lucky enough to be able to help their kids out with the deposit for a home, there is some level of resentment from said kids because they still are relying on Mum and Dad.

Quite rightly too. Why should they have to? They are grown-up after all, yet economic and social conditions have changed so dramatically they are unable to attain their primary goal of a first home.

The parents – largely from the Baby-Boomer generation – have benefitted from decades of double-digit house price inflation and final salary pensions. They can afford it, in other words.

This is why the Family Building Society exists in the first place with its innovate Family Mortgage, specifically designed to help out those family members who cannot reach a deposit by using the equity in their own homes to release enough money. Our recent research shows the average family contribution to a first-time house purchase in the UK to be in the region of almost £60,000.

Now, a report from the Centre for the Study of Financial Innovation argues that the housing crisis has another cause – never mind the pain of first-time buyers – if you help out the last-time buyers you will help free up the housing market.

The report’s author, Professor Les Mayhew of London’s Cass Business School (which supported the report along with challenger bank Aldermore) says everyone knows the UK has a housing crisis.

But, he says, simply building more houses is not enough. He advocates a set of policies to encourage down-sizing by catering for the needs of those empty-nesters who wish to release housing wealth to enhance pension income and cover care home costs.

Professor Mayhew said: “The UK population is growing and also rapidly ageing thanks to improvements in life expectancy. By taking a long view, the research clearly shows the origins of today’s housing crisis and what can be done to tackle it. A better alignment of the housing stock with housing needs, along with improved financial incentives, would significantly alleviate housing pressures to the benefit of all.”

In the end, financial innovation is the answer to the housing crisis, says the Professor – and in that regard, we wholly agree.

You can read the report here.

By Steve McDowell 

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