The UK is taking another step towards a two-tier housing system where the rich own everything and the poor give them money for the privilege of not sleeping outside.
Loughborough Building Society has joined Bath Building Society in offering a 'Buy for Uni' mortgage to students, whereby they can get a mortgage for up to 100% of the price of a house as long as a rich family member agrees to back it. That family member needs to offer either money or equity in a property they own.
The mortgage can be for up to £300,000, which would buy something pretty palatial in Loughborough. The house has to be within ten miles of where the student is enrolled. The student then rents out the spare rooms to their uni buddies to cover the repayments, giving them a weird power dynamic in their friend group and allowing them to get on the property ladder at the expense of their peers.
Admittedly, the system is not much worse than the traditional one whereby students rent from octogenarians who've owned the house since 1936 when they bought it for two shillings and a pint of milk, but at least said octogenarians usually employ an agent so that the boiler gets fixed when it explodes in mid-December. Well, in theory, anyway.
Bath Building Society Chief Exec Dick Jenkins tells the Guardian that the system, which has been in place for nearly a decade in the city, is indeed benefiting the rich kids most:
"We do come across the occasional person who thinks that we are offering them an enormous amount of beer money, but we obviously disabuse them of that notion quickly. Most people are pretty serious and switched on and tend to come from reasonably well-off families because we do need to take a collateral charge over mum and dad’s property to make that product work, so there has to be some equity in the parents’ property."
The rich get richer, folks. [The Guardian]