The Bank Of Mum And Dad Is A 100% Winner
Google the phrase Bank of Mum and Dad and you get 19.9 million hits, while doing the same with 100% mortgages produces 37.4 million.
It’s safe to say that both are worn to the point of cliché and that 100% mortgages have generated negative media coverage up to and including being blamed for the 2008 financial crisis.
And yet the two old favourites have hit the headlines yet again, generating acres of largely positive coverage for Legal & General (with the help of the Centre for Economics and Business Research) and its Bank of Mum and Dad report and for Barclays with the update of its Family Springboard mortgage, which is effectively a 100% mortgage.
Legal & General’s report delivered a new spin on the old favourite by estimating the Bank of Mum and Dad will account for one in four mortgages this year and lend £5 billion with an average loan of £17,500.
Barclays launched the first 100% mortgage since the financial crash, although applicants need a £50,000 salary and a parent or guarantor willing to put 10% of the house price in an account generating interest for three years.
L&G’s report was launched the day before Barclays made its announcement with the happy coincidence that both companies generated coverage and comment for each other and tapped into the media and public obsession with house prices and mortgages.
The interest in mortgage stories undoubtedly helped drive coverage, but both organisations delivered key insights and material which enabled them to stand out and be more than just another report or mortgage launch.
The lesson from Legal & General is that a straightforward message that taps into Brits housing obsession while adding new insight is a major boost to media coverage. They also had the support of chief executive Nigel Wilson so had a heavyweight commentator with a strategic overview to back up their story rather than just a spokesman.
Barclays launch of a 100% mortgage, albeit one with qualifications, could have backfired with accusations of irresponsible lending. But again they were clear in outlining the product features and in making it clear that they were building on a previous product. And they did not call it a 100% mortgage even though every journalist did.
It is unlikely the two cooperated on timing but the fact that one was followed by the other ensured there was momentum for both. Both were strong media stories on their own with strategic rationales and genuinely interesting takes on old issues. The lucky coincidence was well deserved and the Bank of Mum and Dad was a 100% winner once more.
*Photo credit: Legal & General
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