To help daughter with a mortgage

Are you gifting?
Will they be joint tenants or tenants in common?
might you need the money again?
if it’s a flat leasehold service charges can be crippling - if they can pay them what happens?
if they break up can your Dd afford to buy him out?

in the right circs- it’s hugely beneficial and life changing but it can go wrong and there are benefits to renting ( it gives a good degree of flexibility)

As someone who benefitted from this myself I can't tell you how life changing this has been, and how grateful I am. As others have said, get it sorted legally in case of split.

Property prices are 10x av salary nowadays- more in London - you need HUGE deposits to get on the ladder so this is why parental help can make such a difference.

The reasons against / alternatives:
Suggest they do a 1 year rental first to a) live together b) test the area of London / type of housing they think they want. They're young, they might think they want a garden but then have no time for it, or that living on a main road doesn't matter but it does, etc etc.

It's also worth thinking through that they don't have any plans for travel, moving, etc etc. People say plan for 5 years, in reality it's fine to sell after, say, 3, but any less and chances are you'll probably have been better off renting after costs.

London rent is extortionate, I've just bought by myself in London mid 20s and I'm so grateful that I'm putting money into a mortgage and not to Landlord. If you want her to buy it by herself, make sure he doesn't contribute to the mortgage otherwise if they split up, he could take her to court to get money back. Also get a deed of trust

It's great idea only get legal advice as if they split the partner will get half. I think that basically you can put a charge on the property. That way your money is protected if things don't work out.

I don't understand this - how can she get screwed over by him in this situation?

It's great that you have the money.
My strongest advice is to offer it after they have rented for a minimum of 12 months.
Living with someone is a whole different thing to being boyfriend/girlfriend and living at home.
In 12 months you will know whether it's the right thing to do. Yes obvs to ring fenced deposit then given the amounts involved.

Would you want it back?

If you do she would need to ring fence it to ensure he doesn't get half if they split.

My mum and dad did. Granted it was 15 years ago and £6k. We didn't protect the deposit as wanted to be joint tenants with survivorship rights. Worked out fine - we are in a bigger house now, nearly paid off with £180k equity.

Your're lovely and I intend to help my daughter get a house and a mortgage when the time comes. Just look at the other thread on here at the moment (renting in your forties/fifties) to show how hard it is now to get on the property ladder. Get some proper financial advice though to: - ensure it is a gift, that you wont be clobbered later, that the deposit is protected, which may mean the house is solely in her name. If they later get married it will be far harder to prove but corss that bridge.

No that is not the case if legalities are taken care of .

Let them rent together first for a year or two

Then come with their plans for location etc

Bearing in mind mortgage payment is only one cost of owning there is maintenance etc as well

Can they afford to borrow enough for a place in London (plus pay the mortgage, bills and silly service charges on top)? If they can then yes, it's better to buy.

Nice to see a parent who actually wants to help their child for a change

A change from what @MummaMummaMumma ? It's really common for parents who can afford it to allow their adult children to live at home to save for house deposits or to give them money towards a deposit - it's pretty much the norm in fact.

I'd do it, but I'd try to protect the £50k somehow, in case of a split. Not sure how you do it, but there must be ways.

If I could afford it, I’d do it, no question. Dh and I have helped both dds to buy.

As long as the deposit is ring fenced, yes, it’s very sensible. I hope we can do this for dc when they are a similar age. It would have made a massive difference to me if my mum had been able to do the same. I’d probably be mortgage free by now.

You will get many people recommending a deed of trust for your daughter in order to protect her and her share in case of a split. Many of those people will have had little experience of the practicalities of these when things go wrong.

Yes it will set out financially what your daughter is entitled to, but in my experience it caused an absolute nightmare.

You are still dependant on the other person to sell. They can hold out for whatever offer they like (unless you get a court order). In my case, my ex was financially much better off staying in the home we owned together. And so he scuppered sale after sale in order to keep me subsidising his living costs. Yes my money was protected, but physically I was trapped.

After being so brutally burned I would never tie money up with someone I am not prepared to marry. Buying somewhere together is not a baby step towards marriage in my opinion.

Most people recommending a deed of trust have no idea of the realities of what actually happens when things go wrong.

Lovely in theory but what is the whole picture? How much does she earn and actually save?

There is a difference between earning £2k a month and saving £1k and earning £1400 a month and not spending £1k on rent.

She might like spending her 1k on other stuff, she might not want to move out when she realises it's a bit shit no longer saving £££ every month and earmarking some for a nice holiday.

It's a lovely gesture but once she's moved out, that's basically it, her money is commited to a mortgage, life and probably kids for the next 20 years.

She might prefer living at home and enjoying the opportunity to save a big nest egg whilst still dipping into it.

Basically unless you want her to move out and want to know if this is a fair way to do it, I'd sit back amd be guided by her.

I'd gift it to her. In London prices are so high that if they split she may struggle to get back on the ladder. I'd get a solicitor to draw up an agreement so that she gets the deposit plus interest etc back in the event of a split

If you do gift it make sure it's a true gift and you aren't going to want it back! And don't attach conditions - eg DD wants to buy a new build in the city 300 miles away from you and you want her to buy a cottage in the village you live in.

There's been a couple of posts recently where the recipient has been asked to repay the 'gift'. Which seems to be a total misunderstanding of a gift.

As it's a gift it would need to be taken into account for inheritance tax purposes (up to 7 years I think).

Even if they did die within 7 years the £50k isn't physically given back just accounted for in the estate for probate purposes. Any IHT that may be due is paid by the estate. If its only one of the parents that die chances are there is no IHT anyway. If both parents die and IHT is due chances are the estate can foot it anyway.

That's really nice of you to think of them, my BIL got his girlfriend pregnant at 17 so the in-laws bought them a house. They broke up a few years later so he sold the house and kept all the money. The other kids got nothing (but at least weren't teenage parents I guess).

If you can afford it I'd do it. But get legal advice first. And consider not having the property in joint name with the boyfriend, as it sounds as if he's not going to contribute to the deposit. The property could be in your daughter's name and he could pay a sensible rent, rather than half of the mortgage and utilities.

Most BTL mortgages have a clause restricting you from renting to family members.

I’d suggest that you ringfence the deposit. I’d present this as a common sense thing rather than anything else. So your daughter would get that back first and then half the equity. Do you know the boyfriends family well? They might stump up some cash / equal amount.