It’s back! The return of the 100% Barclays mortgage might bring a new wave of first time home buyers. It should also inspire confidence and concern in equal measure. For seasoned investors and arguably anyone who remembers the last financial crisis (which is hardly anyone, evidently), the fact that it came about as the result of a massive property boom in the US, fuelled by excessive and irresponsible lending in the form of sub-prime mortgages should set alarm bells ringing.

The UK property market didn’t suffer to anything like the same extent as did its US counterpart. The US bubble burst. The UK’s deflated. But you’ll be well aware via recent house price data that its long term ballooning has resumed with gusto. And 100% mortgages are set to inflate it even more. Barclays is not taking much of a risk here though. The catch is that a wealthy benefactor (let’s assume the buyer’s parents) must deposit cash to the value of 10% of the purchase price into a savings account linked to the mortgage for the first 2 years, though this does pay a rather attractive 2% interest. Canny, that, just a month into the new financial year and with fixed rate cash ISAs maturing.

Thus, are those 25% tax free lump sums George now allows the UK’s silver-haired savers to withdraw from their pension pots set to push the bubble to bursting point? George designed this as a way to coax pensioners into spending this money on things like cars and kitchens to boost the economy. He did not intend for it to be merely shifted into a bank account for the kids to indulge themselves in a new warehouse conversion in Seven Sisters.

While this might sponsor some welcome competition in the banking sector, is it not also going to fuel yet more demand for already overpriced UK property (OK, we’re really talking London and the South East here)? And what about those whose parents are not what we may call ‘flush?’ How are their kids ever going to get on that bottom rung? The criticism of this as being yet another tool that will only benefit the well-off is pretty well founded. Then again, its structure may well be to ensure that only those with the means to take a hit from a property downturn get involved, thus avoiding sub-prime 2.0.

If the housing bubble bursts within the following 2 years and the poor homeowners are forced to default, Barclays pockets the cash and takes the keys. At that point relations become rather strained between parent and child, and of course family and bank. If, however, house prices continue to sky rocket then the collateral may be withdrawn under the assumption there’s now enough of an equity cushion. It’s only a little bit worrying that everyone still thinks house prices can only sky rocket. Travel back in time 8 years and tell that to a US >100% mortgagee.

The reason we’re here with this new Barclays mortgage is that the Bank of Mum & Dad is already a major player in helping the UK’s young to get onto the property ladder – something everyone in the UK still thinks is the most important thing you’ll ever do in your life. It is the reason people delay marriage and parentage until well into their 30s, even 40s. With most parents who help their kids buy a house seeing the assistance as a gift, not a loan, Barclays is offering an alternative. With the Barclays mortgage, the parents will get their money back with interest so long as the housing bubble doesn’t burst.

But with government help-to-buy schemes reducing the deposit requirement to as low as 5%, is it not a better idea – psychologically if anything – for first time buyers try to raise that themselves? They’ll have more choice and won’t be risking anyone else’s money, but the Bank of Mum & Dad will still probably have to furnish the place.

Apart from that, and this might just be my unique take on the situation, maybe people should not be spending a good portion of their lives living on pasta with pesto (own brand mind – none of that £2 a pop Sacla stuff)  just so they can buy a million pound studio flat in Harlesden.

I’m off to buy a Dutch Barge – it may not appreciate in value but it’s more interesting than bricks & mortar and unlikely to sink like a stone if the market turns down. Well, hopefully.