Do you think family should help younger generation to get on housing ladder?

[grimeandlime]

A neighbour of mine has a daughter who is 26 and a lawyer in London. She is a lovely girl and hugely hard working, but her mum was telling me that she cannot even dream of affording a flat due to the huge deposit needed.

Her grandparents live in a 6 bedroom detached house worth about £1mil I reckon. According to neighbour they have investments worth at least £500k due to selling off family business and inheritances.

I know it's got nothing at all to do with me, but surely they could chuck each grandchild £100k as a deposit for a flat, and downsize to a bungalow/ retirement village/ nice flat.

Do you think families should try and help the younger generations to get on the housing ladder?

Whilst it is all well and good giving your money away my generation didn’t really have that sort of thing happen but I do know a couple of people who were helped to buy a better property than they could have afforded by their parents.

Neither really moved on in their lives. They both ended up selling their respective properties and downsizing because they had both run up debts and couldn’t afford their life style.

For my dc I will pay for courses in diy so that they can buy a cheaper property and have the skill set to do up a place. But anything else is not on the cards.

I think it’s great if people can help but expecting people to actually move house to release equity is a step too far. Maybe if a child or grandchild was living in absolute dire straits it would be understandable. But as a city lawyer she is hardly on the breadline. We all know it’s more expensive to live there and yes to poster upthread a flat can cost a mill

harrietpn

I think there are two ways you could help:

1. Help for a deposit
2. Sit down and talk about finances and get together a strategy for how to actually save for a deposit.many want option number 1 they don’t want to give up £100 a ticket festivals and going off on holiday with mates eating out ect so the spend all their money pleas poverty and want to bank of mum and dad

I think unless you know the ins and outs of their personal finances, what you would do is irrelevant. That 500k investment might be their joint pension - lots of people who run their own businesses don’t have pension plans, the business is it - and they may live another 25 years.
FWIW, I’d help mine if I could (though having probably already helped their parents, perhaps if anyone “should” help them it should be their own parents?) but I certainly wouldn’t if doing so would put my security/care costs in very old age at risk. I don’t want to end up in a grim, council care home thanks!

Young people have always had to make their own way, it’s not a new thing. When I was young, early 80s, young people owning their own flats wasn’t the norm at all. Most people, if they moved out at all lived in rented flat shares or still lived with family until they married and even then didn’t expect to have paid of their mortgages until their own kids were adults.
Expecting to own your own flat at 26 is a relatively new thing (and I think unrealistic and expecting a bit much, frankly) She’s a lawyer, in 10 years she’ll be well able to afford her own mortgage.
Grandparents have lives too! (We’re not yet but have plenty of plans when we are and intend to enjoy doing things we couldn’t while we worked hard for decades and did our bit bringing up our own kids).

I wonder if OP's friend has made it clear she's willing to provide any care the GPs will need after they've sold their big house to give the cash to their grandchildren??

Yes, I really feel a family that pitches in together will be stronger, in all aspects, for it. I really don't think older generations see that if you help you family in the here and now, they will be able to help you later, when you are frail, perhaps suffering dementia, illness etc. I see a lot of older parents dangling the carrot of inheritance in front their adult children: 'don't worry you'll get a decent wedge of cash when I die' type thing. This is of no help when your up to your neck in saving for a deposit while renting, crippling childcare costs, stagnant wages... and will be still when your parents get elderly and die and not in a position to drop everything to help them. Money will get sucked up in care and inheritance tax.
It'll be a reap what you sow situation. Lots of people wont be able to help elderly relatives because they'll still be swimming against the tide of their own lives.

Theladylady I dont understand your post.

The bit in bold on my post, is what some else said. I am not misrepresenting anything. Someone asked where you get a house for the same price as an Audi.

I have a house worth 85k. So about the price of an Audi on finance.

I didnt write the part about where do you buy a house for the same price as an Audi. I quoted another poster.

I was simply commenting that in some areas of the country, it's possible to buy a house the same price as a luxury car.

I think for a city lawyer not being able to afford to save there is something going on.

Either the salary is a pittance in which case why train for something which is not going to be able to keep you or this person is spending far too much.

Whilst it is all well and good giving your money away my generation didn’t really have that sort of thing happen

But younger people now are not starting out on the same footing are they? Uni is not free, and they leave with massive debts, the housing market is crazy, and you need a huge deposit, wages are stagnant, my parents never had to pay for child care, whereas I have to pay through the nose for it etc etc. Its really not a fair comparison.

“Money will get sucked up in care and inheritance tax”.

Missing one vital word, “their” money.
Lots of entitlement here. No-one is owed anything. Whatever you’re left when relatives die is a bonus and should be gratefully received. Not resented for how little it is because the old relative had the bloody audacity to spend it on being cared for in old age, how very dare they!
It’s their money, they earned it, they can spend it how they like and leave it to the cats home if they feel like it. No-one is owed a living.

Putthatlampshadeonyourhead. Sorry

Surely the situation of said 26 year old plays a part? If she/he is out partying a lot, spending lots of money on going out, clothes, holidays etc then I wouldn't feel like contributing my hard earned money to help him/her on the property ladder. However, if said 26 year old had been saving hard for several years and was still struggling then yes I would like to think that I would help out.

My son is 23. He chooses to spend his (not inconsiderable) salary on leasing a sporty car and paying the (massive) insurance premiums instead of saving for a house. He doesn't go out or go on holidays. His father thinks he is doing the right thing as 'you're only young once' and 'sporty cars are essential when young' whereas I think he should get a less sporty (expensive!) car and save towards his own house.

In this situation I would not feel guilty for not helping him on the property ladder.

A lot of it is going to depend on the child. A responsible offspring that saves and is financially savvy? I'd help them if I could. An offspring that spanks it up the wall on tech and clothes and booze etc? Lmao, no way.

Theladylady it's ok, I was just really confused.....not that difficult to confuse me at this time on a morning.

I find it hard to feel sorry for a 26 year old lawyer living in London.I managed it as a nurse and had a Whale of a time.I moved out if London when I wanted to buy a house,rented and flat shared until then.

I think sometimes people forget how impossibly expensive housing is today in relation to wages, compared to years ago. The goal post haven’t just been moved, they have left the pitch completely. It’s incredibly unfair on younger generations, housing is a necessity not a luxury. It is simply not possible to save for a few years and buy a nice semi.
Inheritance from my Nan helped me get on the first run of the ladder. Because of this I’ve made it clear to my mum that anything she chooses to leave me will go to my DC to help them with housing. I think that’s fair and so does she.

We've just been through this with my in-laws.. the truth has become clear that care homes or living care at home is very expensive and for two people will chew through £500,000 easily. My in-laws are worried about running out of money and not having a choice of where to go but where the council puts them. Money gives you choice and I can understand why they want to hang on to it

BlindAssassin1
I was trying to point out that the people I knew who had money given to them to get further up the housing ladder (and that it was not a common occurrence years ago but I did know of 2 separate people this happened to).

In both cases it didn’t really do them any good.

I do know someone who is younger who has her credit card bill paid in full each month. Her and her dh nearly went bankrupt and ended up in a rented flat with 5 children after being in a big detached house.

I don’t think it teaches you about money and how to manage it if you just get handed a big amount.
You don’t adjust your life style and eventually everything turns to dust

Depends on the situation tbh . I wouldn’t be helping someone buy a house in London just because they wanted to be “ in London “ if they could easily do their job somewhere else .
It also doesn’t matter how hard working she is ( aren’t the majority of people hardworking ) 26 is very early to be thinking of buying property especially in London . I’d want to know what they were doing to save for a deposit too . I wouldn’t be willing to help if they rented a flat alone , travelled extensively ,had an expensive car , ate out a lot and wore expensive clothes , bought designer bags etc . If at 26 they were doing everything they could to help themselves then yes I’d help out .

I do know someone who is younger who has her credit card bill paid in full each month. Her and her dh nearly went bankrupt and ended up in a rented flat with 5 children after being in a big detached house.

I'm not sure about this tbh in terms of cause and effect. Who on earth as an adult would let their parents/ grandparents pay their monthly credit card bill? . Probably the type of person with no concept of personal responsibility or pride.

We have a property each for my children. They are still young but already have a good grasp of financial affairs .
Eventually they will inherit but we won’t be putting it in their name when they are young. In the event of a divorce i have no intention of handing over half the property .

My colleagues daughter “can’t “ afford to buy a house . She travelled to New Zealand for a few months last year and drives an Audi. We don’t live in an expensive part of the uk . She could if she really wanted to .
She probably can’t afford to travel, drive an expensive car AND buy a house . If she was my daughter I’d be explaining that but then if she was my daughter she’d already know .

Ppl also have to think about care costs in old age nowadays. As ppl are living longer but may not be able to stay at home, care costs can run into tens of thousands. My mum and I have discussed her will for example and my brother and I understand that we will
inherit whatever is left which could be not very much when all is said and done. Having said that they are not property or cash rich as per your example so they couldn't help us any sooner.

We were only able to buy and put down a decent deposit because I inherited some money from a very unlikely source and that got us out of shit creek. We've moved 60 miles out of London to afford what would have cost a minimum of £500k in Greenwich borough - even with both of us working, the cost of rent plus childcare left us no opportunity to save enough for a deposit.

Something has to give and I don't think it should necessarily be the DGP downsizing...

If you can afford to help your children, however old they are, why on earth wouldn't you? We have 'chucked' well over £100k to each of our DSs, money we did not really need, but it enabled them to have good houses. I would draw the line at selling our own big house though, we need it when they and all the grandkids come to stay.

My grandpa helped my mum and dad and they helped us. We'll help our DC's as much as we can. Won't be anywhere near £100K each though! Having said that, it's up to them what they do with their money.

If my parents were in this financial situation I'd be happy they were comfortable and probably able to afford support in retirement. I'd never expect anyone to downsize to fund a substantial house deposit.