To feel absolutely dreasful about asking parents for equity release.

[Meluamelua]

Just that really.

I'm in a very difficult position with a one pre school DC and one school aged dc and working part time. Unfortunately h left me two years ago (there were problems but I would have worked at it- he is now unemployed and living at his mums). Our home is rented and the land lord has made noises about wanting to sell for the equity. A little, cheap house has come up locally to buy (unusual as is an area with low housing stock) and I could just about do it if one or other of my parents released a relatively small amount of equity (about 100K each) Between them their homes are valued at about 3.5 milion. They have never given me any money before.
My mum is livid I have even asked her and says I am spoilt and grasping. My dad simply put the phone down on me. My brother said I should expect these reactions.

I feel dreadful. Is it so bad to ask this of them? At the end of the day it is security for their grandchildren while still school age and the money will go to them eventually in some form.

Am I naive, grabby, entitled?

Perfectly prepared to be told I'm being unreasonable. Go easy though I'm a bit sore from all the stress!

If I win the lottery jackpot this weekend- I'll help you out.... The odds are that I won't sadly, but I know where your coming from- I really do.

I can understand why they are reluctant to realease the money. Older people dont like taking risks. Could you not get a mortgage on your own. 100k each is a lot of money and 200k is not cheap for a house. Property prices in the UK are so skwed. 200k where i live would get you a detached bungalow and 3.5million would get you a mansion. What about your local authority if your landlord sells your classed as statutory homeless

I think you asked they said no, you were right to ask as they are right to say no.

If it were me and I was well off I'd rather give my DCs money just now to stop them from struggling than wait until I die.

Why can't the parents buy a house as an investment and allow the OP to live in it paying rent but having security? Don't understand the parents really the OP shouldn't have really had to ask, but that's just my opinion.

Op For what it's worth I COMPLETELY understand your situation and don't think you were wrong at all.

You weren't asking either parent to sell up, you were talking about Equity Release - there is no servicing of that loan in the same way.

I understand you are desperate and trying to find a way to provide some security for yourself and your children. Completely understandable.

£200k does not buy much in some areas, and they clearly have a lot of equity in very expensive homes. In my experience lots of parents in similar situations do exactly what you are suggesting as a form of tax planning to reduce the IHT impact on their children.

Aside from that I would hope they feel a responsibility to see their child and grandchildren secure for their futures. I hope things improve for you. Maybe talk to CAB or someone similar to see if they have any ideas? Good luck

a relatively small amount of equity (about 100K each)

I'm not sure in who's world £100k is a small amount of money? Hope things work out for you OP, but £200k is not a small amount.

Flappy you are talking about £200k against £3.5 million assets plus financial portfolios etc. It is in relation to that not a huge amount.

And as someone very wise has already pointed out the tax man will be getting a huge chunk of those assets eventually. It makes good financial sense all round for the parents to invest in a property for their off spring.

It is a huge sum, and would buy you something outright if you chose a different area. I've seen 2 bed houses going for about 50K recently. Presumably you want to continue living in Wimbledon or wherever, rather than moving to, say, Cumbria. Cumbria seems to have a few at under 50K right now - I've just looked, but there are similar prices in Newcastle and Bolton ( and I stopped looking), so all over the place.

My parents have what seems like large assets. They are on paper, not in their bank account. I would never expect them to sell their house in order for me to buy one outright.

Flappy is right, OP's family do not discuss money so there is no way she can have detailed information regarding their financial status - for all she knows they could be in hock up to their eyeballs.

What if one of them gets sick and needs social care next year, how would she pay for that if a debt is being defaulted on?

What if she gets ill and can't make the interest repayments if all is as she imagines it to be and they took out the debt on her behalf?

There are far too many risks and variables involved.

They have a golden opportunity here to avoid inheritance tax by transferring equity, or enhance their income by buying a buy-to-let of their own and then renting it out to the daughter, who will be a rock solid long term tenant and have security of tenure for herself the GCs.
How does that avoid inheritance tax? They would still own the property so it would form part of their estate and be liable to IHT.

My ILs have thrown away a vast amount of money on equity release. I don't think they have a clue how much it will cost them.

If people use equity release to help one child, what happens when another child wants help?
What happens when they want to make some adaptions to their home to suit their age or disability?
What happens when they want to get some extra help in when they are struggling with daily living?

My. The comment you quoted said 'avoid IHT by transferring equity OR enhance their income by buy to let'.

Flappy the OP isn't expecting her parents to sell their houses either.

Are you Donald Trump?

Finding this mind-boggling! I can understand op asking for some help form her parents, and of course it's not wrong to ask for help. It would be nice if they could help out, given the situation. I can understand the posters saying they would help in her parents shoes. In their situation, I wouldn't go down the equity release route though, it's inefficient and costly. I would look to see if there were other ways to help, though.

However, OP seems to have pretty high expectations because she's not asking for a small helping hand for a deposit- if I have understood correctly OP wants her parents to give her 200K towards buying a 300K house (happy to be corrected if I have misunderstood). If so, she is asking her parents to provide her with 2/3 of the value of the house in deposit? That's a very big ask. Do people really think it is reasonable to expect their parents to fund 2/3 of the cost of their housing?!

Equity release isn't simple, it has lots of potential implications. Not least the fact that it will be OPs parents debt, secured against their home. OP says she would service the repayments- all well and good, but what if she can't at some point in the future? Her parents must then pay her debt. I wouldn't ask or expect that of my parents, even though they are well off.

This thread has really touched a nerve with me.

I have just retired in my late 50s and DH will be retiring in another year when he is 60. We have 3 DC and are still supporting the two youngest through university. We plan to downsize and have our large expensive home on the market, as the upkeep is too high and there is a substantial outstanding mortgage, but no offers yet. We bought a flat in London last year, just before the stamp duty doubled on second homes (where our youngest lives as it is near her uni), as well as a house in the place where we intend to retire to. All three properties have mortgages. We have money in pensions (not final salary) and three other BTL properties, one of which is mortgage free. We have no other assets or cash in the bank and the BTLs are needed to give us an income in retirement.

The oldest DC, who graduated two years ago, is living in a house with her BF which is jointly owned by BF and his parents, mortgage free, his share having been paid for from money given to him by his grandparents. BF's parents have also just retired and want their money out of the jointly owned house, so BF needs to put it up for sale.

DD wants us to give her money to buy out BF's parents or to buy another house with BF, as we are 'rich'. We are probably talking about 50k, but we just don't have it at present, and as others have said, we would feel that the other two DC should be treated equally, so that means £150k. We look much better off than we actually are.

Neither eldest DC nor her BF have worked or tried to find jobs since graduating 2 years ago, apart from DD did a Christmas job for 3 weeks a year ago. They are not intending to look for jobs, as they are not like other people and don't want to be 'wage slaves' or 'mortgage monkeys'. They say that they intend to live off benefits or go 'off grid'.

Relations are very strained at present, because I said DD should be financially independent, that I loved her and wanted to help her when we could, but she needed to help herself too. Also, that the money had to last me and DH for the rest of our lives and we might need care in old age. She thinks it is none of my business what she does, which I accept, but I can't help worrying about her. She seems resentful of me and DH's lifestyle, saying I still go out to lunch a lot and we go on holidays.

She and BF clearly don't believe us that we don't have the money readily available, and have expectations which they consider we are being unreasonable in not meeting.

Like others on this thread, I love my DC intensely and would give my life for any of them, but DD's conduct is deeply, deeply, hurtful to me. It's not just about the money; it runs far deeper than that. I have always been financially independent and I was hoping that my DC would want to be independent too. It's not that I wouldn't help them or that I don't want to, it's the whole mindset, the sense of entitlement which upsets me.

So I think I understand the position, but can't really offer a solution save to say that most parents like to feel that they are genuinely loved by their offspring. I can see why your parents acted as they did, out of hurt not because they are mean or don't want to help, as shown by your DF's subsequent suggestion that there should be a meeting to discuss things. How did it go, BTW?

It doesn't sound like this house you want to buy is very cheap if you need 200k! Can't you find somewhere cheaper? We managed to buy by moving to a less desirable area but beggars can't be choosers.

Equity release is a shit scheme. It usually ends up with the equity release company owning
A much much larger share of the property than the original amount of the equity release. I would only advise people to go down the road of equity release of they don't wish to leave any inheritance to anybody or don't want to rely on their equity to fund their old age )which would be irresponsible and stupid if they don't have large cash funds available).
I don't blame the parents for saying
No. It's almost like one of their children is wanting their inheritance before they have even died. If the parents had 3.5m in the bank then it would be totally reasonable to ask for a loan but they don't have the cash and would have to use their homes to find that money. Lots of older people with £1m+ houses are actually cash poor and only have such expensive properties because they bought decades ago for next to nothing in areas that have seen ridiculous increases in property prices.

CamemRoberta I can imagine that as a loving parent (I have an adult son) you feel somewhat responsible for your DD and the desire to help is strong. You are doing entirely the right thing by expecting your DD to support herself. She is an adult and her choices have consequences that she is responsible for. I am sorry that she has put you in this position.
OP YABU asking for that kind of money from your parents. A few pounds until payday or help replacing a large item maybe but the kind of request you made is not reasonable.
I am sorry things are hard for you. They are for many, many people and you may feel better for being independent and not being 'beholden' to them or your siblings

CamemRoberta, your DD needs a good kick up the arse. Sorry to be blunt.

OP, you seem like a nice caring mum and I understand you want the DCs to be secure. But asking for this kind of money is completely unreasonable. Your parents have presumably raised you, worked etccc. Now is time for themselves. And what about your siblings? Would you expect your parents to give them money too? And if not, why would your parents help you and not them?

You need to stand on your own two feet. I know it must be hard with the DCs but it's the in,y way to be happy, free and continue to get on with your family.

camen. You're doing the right thing not giving your dd this money. If she doesn't want to be a "wage slave" then she needs to see what the reality of being on the dole entails. If this is a shitty bedsit or flat then so be it. Maybe then she may be more motivated to work.

Not RTFT so this may be useless but just to say that equity release has caused a lot of shit in my family.
If you need housing urgently and your parents have (presumably big) multimillion homes can they house you in their homes for a bit? or permanently convert a floor/s of their place into a flat for you and Dc?
Pay for an annex to be built on to theirs if they have a big garden?
Sorry they are not being more helpful now, but I am just trying to think laterally within their limits.
If you have an otherwise good relationship perhaps something like that could work while you are getting back on your feet. Good luck OP.

Not only is it an enormous cheek to go begging as am independent adult, it is also detrimental to self respect. How are you ever going to develop adult relationships when you still feel that you have a right to money merely because you exist?

Equity release is a terrible, risky option that should be considered only as a last resort.

but also, the amount of money you are asking for is absolutely astronomical!. Insane! how can anybody think they are entitled to waltz up to a relative and ask for that? seriously!?