Legal & General’s annual research into the the ‘Bank of Mum and Dad’ has been published today. According to the study, the Bank of Mum and Dad will underpin more than one in four house sales this year, making it the equivalent of a £5.7 billion mortgage lender.
Twenty-seven per cent of buyers will receive help from friends or family in 2018, up by two per cent on last year. However, the average contribution has fallen from £21,600 to £18,000.
The insurance giant has been producing its Bank of Mum and Dad report for several years now, and the annual study has become one of the many indicators of the housing crisis the UK faces.
With the average increase in property prices far outstripping wage rises, the deposits required have made buying their first home a distant dream for many. That it has become an accepted norm for young people to get onto the housing ladder only if they are lucky enough to have parents who can help them – accentuating inequality within generations in addition to the inequality between the generations – is a depressing state of affairs.
Action to fix the situation needs to match the rhetoric.
Theresa May is coming under pressure to support a change in Northern Ireland’s abortion law after the Republic of Ireland voted overwhelmingly in a referendum on Friday to repeal its ban on abortions. Labour is pushing hard on the issue and it was reported in The Sunday Times that four senior female Conservatives – Amber Rudd, Justine Greening, Nicky Morgan and Maria Miller – back change. However, May depends on the support of 10 DUP MPs, who oppose reform, and has said the matter is a devolved issue for the Northern Ireland Assembly to “debate and decide”.
In today’s Daily Mirror, Baroness Chakrabarti, the shadow attorney general, has called on Theresa May to support a change in Northern Ireland’s abortion laws, saying “the test of feminists is whether they stick up for all women all over the world and not just women we meet at parties”.
The United Nations was aware of allegations that aid workers were involved in sexual exploitation, according to an investigation by The Times. An 84-page, unpublished report, which was produced in 2011 for the UN High Commissioner for Refugees (UNHCR) and Save the Children, identified 40 aid organisations “whose workers are alleged to be in sexually exploitative relationships with refugee children”. The UNHCR wrote to all the organisations and agencies mentioned and made them aware of allegations, and the UN said it had initiated “specific preventive and remedial actions”.
Starbucks is temporarily closing 8,000 US stores this afternoon in order to provide mandatory anti-bias training to 175,000 employees. This follows an incident in which a Starbucks manager called the police to remove two black men who were sitting at a table without placing an order. The men were arrested for trespass, although it later emerged that they had been waiting for a friend. Kevin Johnson, Starbucks CEO, was forced to apologise after a public outcry.
Business & Economy
The government is set to resume the privatisation of Royal Bank of Scotland by selling a multibillion pound stake in the bank. According to Sky News, City bankers and investors have been told to expect a disposal of part of the 70.5% shareholding held by the taxpayer, potentially as soon as this week. However, any sale will be subject to wider market conditions and the ability to demonstrate value for the taxpayer.
Pret A Manger is to be sold to JAB Holdings, a private investment group, confirming news that was first reported by the Financial Times. Although details have not been disclosed, the value of the deal is reported to be £1.5 billion – marking a lucrative exit for current owners, private equity group Bridgepoint, which bought the business for £364 million a decade ago. Bridgepoint had been exploring the possibility of listing Pret but later decided on a sale.
The week ahead
Today, the Bank of Italy is due to hold its annual meeting in Rome, where its governor, Ignazio Visco, will present the annual report on the main developments in the Italian and world economy over the previous year.
The report is likely to garner more attention than usual as concerns about Italy’s precarious economic situation continue. Political uncertainty following elections won by anti-establishment parties has sent tremors through the Eurozone’s largest debt market.
Yesterday, President Sergio Mattarella asked Carlo Cottarelli, a former IMF economist, to become interim prime minister after the Five Star Movement-League coalition abandoned efforts to form a government due to Mattarella blocking their choice of finance minister.
Meanwhile, adding to the turmoil in the Eurozone, Mariano Rajoy, the Spanish prime minister, will face a vote of no confidence on Friday. The development follows a ruling in a corruption case involving members of the ruling Partido Popular, which has been hugely damaging and could end six years of centre-right rule in Madrid.
On Wednesday, the quarterly review of the FTSE Index is expected to lead to changes in the UK company leader board. Ocado, the online home delivery retailer, is expected to enter the FTSE 100 whilst Marks & Spencer, which has been a constituent of the 100 index since it began in 1984, may drop down to the FTSE 250.
In company news, American Eagle, FirstGroup and Abercrombie & Fitch are amongst the organisations announcing results this week, whilst US jobs data is likely to show positive figures with regards to wage growth and job creation.
Kainos Group, Renold
Bank of Cyprus Holdings Public Limited Company
Albion Development VCT, Afarak Group (DI), Belvoir Lettings, Diversified Gas & Oil, Eddie Stobart Logistics, GYG, Harworth Group, Oxford Biomedica, Rotala, Standard Life Aberdeen
UK Economic Announcements
(07:00) Nationwide House Price Index
International Economic Announcements
(09:00) M3 Money Supply (EU)
Columns of Note
The real cost of Brexit is missed opportunities. That is the view of Janan Ganesh, writing in the Financial Times. He cites the example of the business lobby calling on the prime minister to “get on” with expanding Heathrow. Ganesh points out that the votes in parliament are there for such a move, albeit with effort, but that all the political capital, time and effort is being spent servicing the all-absorbing Brexit battle.
In The Times, Rachel Sylvester looks at Philip Hammond’s desire to reform free-market liberalism. She points to some of the chancellor’s party colleagues who have mirrored Labour’s left-wing rhetoric as part of an attempt to counter Jeremy Corbyn, contending that Hammond instead favour more structural reform. Sylvester concludes by saying: “The future will be owned by the politician who best understands how to use the power of the state to harness the new economic reality for the sake of the people.”
Did you know?
During the Easter Rising of 1916, the British Army and Irish rebel forces confronted each other at St Stephen’s Green, Dublin. A truce was observed twice a day during the battle so that James Kearney, the park superintendent, could make sure the ducks were fed.
House of Commons
In recess until 4th June
House of Lords
In recess until 4th June
Topical Questions (if selected)
Stage 1 Debate: Planning (Scotland) Bill
Financial Resolution: Planning (Scotland) Bill
Stage 3 Proceedings: Islands (Scotland) Bill