Giving house to step-daughter?

OP 800K is the absolute maximum (close to 5x) their joint income, and what a mortgage calculator would say. An AIP could potentially be obtained but it's meaningless.
None of this means a bank will approve that much especially with a baby on the way!
They'll only know for sure when they actually apply for mortgage once a property is accepted, a mortgage broker will be able to advise.
Also what happens if the property they want gets downvalued?

She isn't asking for a bloody mansion, a 4 bed terrace, in catchment for a nice school and with a garden, it isn't a massive list.

That IS privileged. Expecting that as your first property is beyond entitled. Christ alive.

She needs a 2 bed terrace, maybe 3, not 4 ffs. She is pregnant with one child. People should buy houses and work their way up the ladder, not expect to start in their forever house.

Your money, your choice. But this is bonkers.

Edit: Just noticed your latest post! A £1Mil house for a starter home? 😂😂

Thanks, OP. I needed this laugh!

The numbers aren’t stacking up for me. If they get £300k from you and have (guessing) £200k separately, the mortgage would be a challenge if they have to borrow £600k. They would be looking at repayments of £3000+ per month.

In addition they will have to allow for £50K of SDLT.

They won't get a mortgage to cover the difference though? They don't earn enough. They'd have to save for an awful long time to get that sort of house. You're better off keeping your house in situ until they're really ready.

I agree with this.

How very sad that that little girl lost her mum when she was seven, but how lucky is she that her dad found you!

Do what you feel is right, but as PP have said I would take legal advice first so that your gift is ringfenced in case of divorce further down the line.

I think it is a lovely and very kind idea but you don't say how old you and your DH are and the income from the house already supports your pension shortfall/lifestyle needs.

Yes it is tough to rent/buy in London but a) it is their choice to live there and b) you also need to look after your needs for the long term. There is nothing to stop you both gifting them a lump sum once you've figured out what you want to do.
She can currently inherit up to £500k from you without paying INT. Debatable whether a Labour govt will go after that threshold though.

You should take a look at the current capital gains tax you will pay on selling your house given that you will have not lived there for 12 years and it's not your primary residence. That may alter your thinking. I would take some financial advice on the best way to manage your assets to benefit your SD and any children she may have. If you are at retirement age, your parents may also pass on and leave assets to you. Or require financial support themselves in their latter years

I'd suggest prioritising your and DH's needs until death, SD and niece/nephew in that order.

Going by these her budget would be between 1.1 1.3K.
Those houses are in good condition as well.
Even with your help they're looking at a mortgage of close to a million pounds!
I'm presuming 150K is what they (she and her husband) currently have? There isn't any more?

It's a lot IMO to take on as a parent of young children.

700-900K would be more doable.

Of course this depends on their plans for future work and salary growth.

well said @Lampzade !

She is pretty much your daughter and it's up to you. Sounds like you have a great relationship too.

Op, irrespective of what you decide to do.
I just want to say that you are a wonderful person and a great mother to your stepdaughter.
She is truly blessed to have a mother like you.

Ask her how much more she would need for a deposit. You don't need to tell her why you are asking, just bring it up next time there is a conversation about house purchases. Once you have a clear idea, you can work out if selling your house will raise enough to close the gap or not. It will also give you an indication whether there will be any left over either for you or your nephew/niece.

I think it is a lovely thing to offer, but I do think getting some independent financial advice on the most tax efficient way to do it would be wise. I also don't mind paying my taxes, but if there are ways to maximise what my money can do for me, I am all for it.

I think this is a nice idea. My brother is planning to leave money to his step daughter in his will, rather than to his niece and nephews (my DC), as he doesn't have any DC of his own. I'm fine with that. He's been a step father for most of his DSD's life.

@IsMadl
We used to live in Blackheath just south of Greenwich ie the first property you posted from rightmove but moved after having kids but we went North
However
Ive just checked out Rochester based on PP

20minutes into central London is amazing so I’ve found this for you and SD.
The garden is huge ( well to me anyway ) and there are extra rooms downstairs for wfh ( I think you mentioned that )

Do it. You are financially secure, even if your DH ran off with the "woman next door". Worse case scenario you can buy a property and you have a good pension.

You don't have to leave money or property to blood relatives - one of my closest (elderly) friends has left her house to her god daughter in her will, she is not related by blood to that family at all, but they have done more with her, and for her, than her nieces and nephews ever have. They have a much stronger bond than she has with some of her blood family. Do what feels right.

@IsMadl I wonder whether your parents had assumed the money was going to your nieces and nephews? And had already told them or their parents. Awful if so but I probably, now the cat is half out of the bag best to talk to your parents and find out what people know or think they know.

I think it’s doable. After a five minute search on rightmove there’s this.
Plan carefully and take your time.

You sound like a lovely step mother. This girl lost her mum when she was 7 and I can bet you she sees you very much as her mum! Your family sound awful just because she's not blood related. This is the family you've chosen to be with so it makes sense to ke to out her needs first. Personally I think you're insane leaving your niece and nephew anything....they have their own parents, I certainly wouldn't be doing it especially since my parents expect it.

On the other hand, for £550k I live in a nice area of East London zone 3, with a not-massive garden but big enough for a trampoline, shed, patio and flower beds.

OP, it's all about location in London. If prices for similar houses can vary by over a million, your step daughter needs to look at areas within her budget, and you need to be a bit more rational. We bought our £550k house with £200k cash and £85k/year joint. You say you're not financially savvy - then get independent financial advice, before you regret it in 20 years. Decide with your mind, not your heart.

@IsMadl

Could you ask her to show you the houses they have in mind, so that you can do the maths together to make sure that it would work out financially?

At the end of the day, they are going to need a substantial mortgage as well as your gift of money.

That is quite a tall order.
Family members are looking at Rochester as it’s 20minutes on the train to Kings Cross they say.

Large detached huge gardens four bedrooms around the corner from outstanding Grammars @£900-950,000 ish

They can’t get that in London. They looked in SE London and all over and were looking at paying more for less with a longer commute.