The Bank of Mum and Dad (BoMaD) has become a popular way for young people to get onto the property ladder. However, academics are warning that this could be widening economic inequalities in the UK.
BoMaD is a term used to describe the financial help that parents are giving their children to help them buy a house or pay for university fees. According to research by Legal & General and the Centre for Economics and Business Research, BoMaD is now worth £6.3 billion a year and is helping over 300,000 people to buy a property.
Whilst this is helping some young people get onto the property ladder, it is also creating a situation where those who don’t have access to BoMaD are at a disadvantage. This is because they are unable to compete with those who do have access to BoMaD and are therefore less likely to be able to buy a house.
This is creating a situation where those who have access to BoMaD are more likely to be able to buy a house and therefore benefit from the rising house prices, whilst those who don’t have access to BoMaD are less likely to be able to buy a house and therefore miss out on the benefits of rising house prices.
This is leading to a situation where the gap between the haves and the have-nots is widening. This is particularly concerning as it could lead to an even more unequal society in the future, with those who have access to BoMaD being more likely to be able to buy a house and benefit from rising house prices, whilst those who don’t have access to BoMaD are less likely to be able to buy a house and therefore miss out on the benefits of rising house prices.
In order to address this issue, academics are calling for more government intervention. This could include measures such as increasing the availability of affordable housing, increasing access to finance for those who don’t have access to BoMaD, and introducing measures that would make it easier for young people to save for a deposit.
Whilst BoMaD can be beneficial for some young people, it is important that steps are taken to ensure that it does not lead to further economic inequalities in the UK. It is only by taking action now that we can ensure that everyone has an equal chance of getting onto the property ladder and benefiting from rising house prices.