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To want to help child with housing deposit?

134 replies

Lightsabre · 30/11/2019 14:14

Can I ask, if you had financial help with your deposit, how much or what % of the purchase you received. DH has conveniently forgotten his parents helped him on to the ladder with a 30% gift but this was many years ago when a house in the area he lived in cost £90K. Flats nearby in SE are circa £250K minimum now and I'd like to be able to gift ds 25% when the time comes (not for a few years yet and we'd need to save more/use some pension). He wants to spend the money travelling (of which we have been lucky enough to do a substantial amount in our late 20's and 30's) but I'd like to help our child as much as we can.
What have your experiences been?

OP posts:
StripeyDeckchair · 30/11/2019 14:39

Nothing from anyone.
We have 4 children so they're not likely to get anything from us. Eldest two are in their GCSE year so thinking about the future; we have invested to be able to help all of the go to university. Hopefully with a good education they'll be able to afford a home one day.

MereDintofPandiculation · 30/11/2019 14:41

Not what you asked but something to be aware of - the deposit is the lender's safety margin in case of falling prices - they do not want to lend £250k, have to reclaim quite quickly, and find the house is now worth only £235k. So if you pay the deposit you will probably have to sign something to say it's a gift and you won't expect it to be returned if the house is sold. Nor will you be able to purchase a share in the house - if you do that, the lender will still want a hefty deposit from your child on their share.

DramaAlpaca · 30/11/2019 14:43

My parents very generously gave me £10k for a deposit when I bought my first home 30 years ago. I hope to help out my DC when the time comes, but don't have a figure in mind. It will depend on what our financial situation is at the time.

HowToBeAWoman · 30/11/2019 14:43

Me and my sibling were very lucky, as my mum gave us approx 25% of the flat price when we bought our first flat. She had downsized from a house to a flat and decided she wanted to help us get on the property ladder in London. We didn’t know the money was coming, hadn’t expected it etc so it was an amazing surprise and incredibly generous of her.

DH and I have already decided that when the time comes, we’ll also downsize and give some of the money towards property for our children. We won’t be able to afford 25% if they want to stay in London, but a good deposit, perhaps.

Socksey · 30/11/2019 14:45

No help.... not only that.... when we sold our house my parents needed to help a sibling and as I had to temporarily move into rented accommodation, I lent them almost £100k.... so all the equity in my house...
They refuse to give it back .... they have a holiday house... they laugh at my very small house I got trying to get back on the property ladder... it has been almost 15 years.... and I get screamed at every time I ask as apparently i would just fritter the money away...
I am a mug.... but apparently I'll get it back as my inheritance in some 25 years or so... 🤔 if it hasn't gone in care home fees etc

Waxonwaxoff0 · 30/11/2019 14:46

I have had nothing form my single mother as she could not afford it. I still rent but am buying a home next year finally.

I will give my DS everything that I can, I do not want him to be in the situation I am in. I will have to work until I drop to pay off my mortgage.

Confusedbeetle · 30/11/2019 14:51

I think its more important to think about what you can comfortably afford. I dont know if you give a lump before the mortgage application, whether it has to be declared as a non repayable gift, but it does if you do it at the time of purchase

Disfordarkchocolate · 30/11/2019 15:03

Nothing and I won't be able to help my children. If I could though I would, without a second thought.

Lightsabre · 30/11/2019 15:06

Thanks for the input and shocked at your experience Socksey - hope it works out for you.
I've never had a penny off my parents as they simply couldn't afford to help out. Hadn't thought about downsizing when the time comes so that's another option we can discuss. I'm secretly hoping they'll settle up North or in Scotland (and we can join them on retirement)!

OP posts:
Wildorchidz · 30/11/2019 15:06

The plan is to help both of ours as much as we can. Have no issue with that. They will also receive a substantial amount of money when my mother in law dies as will her other grandchildren.

ForeverBubblegum · 30/11/2019 15:09

I got no help of my mum, but as a single parent she could never have afforded it. My own DC's are still little, but I pay £10 a week into JrISA's for them. They should each have around 10k by the time there 18, more if intrest rates pick up.

Where we live that's 10% of a starter home, though by the time there old enough to buy it might only get them a flat. I might adjust depending on how house prices and our own finances develop, but at the end of the day they'll get what we can afford, and still be luckier than most.

CallmeAngelina · 30/11/2019 15:09

My parents left a sizeable amount in their wills to each grandchild with the intention for it to be used to fund buying properties.
They are all aware how incredibly lucky they are.

MRex · 30/11/2019 15:09

You need to work out what you can afford rather than basing the gift on house prices. It sounds like you and your DH have different ideas for what to do with shared money, so you'll need to agree a compromise. How do you normally agree between you what to do with money?

Treaclepie19 · 30/11/2019 15:09

We have a savings account for our 4yo. I don't want him to struggle like we have.

TravellingSpoon · 30/11/2019 15:11

I had a very small (£3k) inheritance which I used as my deposit. Neither of my parents would have been able to help me out as they both live payday to payday in MW jobs. I was lucky I was able to buy a house when I did in 2002. When I sold it in 2005 it was worth double what I had paid so I had £30k equity.

Alsohuman · 30/11/2019 15:11

Someone I know did it a different way. They used an inheritance to buy a house outright for their adult child who now pays them an amount below market rent every month.

I personally would only do it if I had “spare” money kicking around. I certainly wouldn’t downsize or take money from my pension to do it.

mindutopia · 30/11/2019 15:12

I think it’s obviously a completely personal choice and very dependent on the family financial situation. My mum is giving us probably 50% of our deposit (which will be very sizeable amount). Dh’s mum, nothing. My mum and stepdad are rolling in it though and literally have more money than they could ever figure out to do with. It won’t even drop their bank balance out of six figures. I don’t think that’s the case for most normal people (I did not grow up with that sort of money at all, we barely scraped by when I was a kid, they just made some lucky decisions later in life and have a good pension).

If I had the choice, I would travel (but not extravagantly), but investing in your children’s future seems better than blowing money on holidays, particularly if you may need their support when you get older and their financial stability would make that easier.

chocolatespiders · 30/11/2019 15:12

Having rented for 20 years I have often thought about this for my two children.
I would like them to be able to buy something and get on the property ladder.
I have never earned enough to get a mortgage on my own but want to help them as much as I can as I wont have any inheritance to leave them!

Thehop · 30/11/2019 15:15

I’ll do what I can when I can, no figure in mind.

Thefaceofboe · 30/11/2019 15:16

My partners parents said they only would help us with the deposit if we stayed local to them. We moved 300 miles away and paid the deposit ourselves Grin my parents have helped a lot with money when it came to renovating the house

doritosdip · 30/11/2019 15:17

I managed to get my deposit because I was working at a startup during the dotcom bubble with generous redundancy package which was the equivalent of 10% deposit.

My kids are teens and I could downsize to release equity for their deposits but I will wait and see what their financial futures are like first.

Lightsabre · 30/11/2019 15:27

Yes, I think dh is of the opinion that ds is getting a good (state) education which should stand him in good stead to eventually get better paid jobs than we ever had/have. Who knows how that will go though - he's not a confident child. There is also the possibility of a fairly significant inheritance on one side but I have seen a lot of people move into care homes so can't rely on that.
We need to plan now to 'grow' some savings as it were (we're not young). Dh doesn't mind downsizing but has an area in mind which is still expensive so that might not resolve the problem.

OP posts:
titchy · 30/11/2019 15:35

I inherited enough for 25% deposit. That, plus dh and I on virtually minimum wage jobs at the time, managed to get us a 2 bed flat in a decent part of London.

I doubt we'd be able to afford that same flat now, even with our joint income of over £100k.

I think you have to think of an amount, rather than a percentage, that you're both comfortable with.

£20k for example may be plenty if your dc settles in a cheaper part of the country and earns a reasonable wage. On the other hand if they want to move to London, but are never likely to earn much, then no deposit you give them them will ever be enough.

In other words don't make any decisions yet!

JenniferM1989 · 30/11/2019 15:39

We plan to help our DS as much as we can when he's older. We aren't rich or high earners but we bought our own house quite young and were a little older when we had DS so our mortgage will be paid off by the time he is in his early 20's. I would like to be able to buy him his first car (nothing brand new but safe and nice), help him with a 20%ish deposit on a flat or house and of course, if he chooses further education, make his life comfortable and pay his living costs.

I got absolutely zero help from my parents. It wasn't something they ever planned for or thought about to be honest. They spent anything my grandparents left in their will for me and wracked up a load of debt on god knows what. I managed all on my own, along with DH, but I don't want the same for my son. I don't want him feeling like he must go out and work full time from 16 years old just to be able to forge a life for himself knowing there will never be any help or even a home he's welcome to live in until he's an actual adult.

Bluerussian · 30/11/2019 15:42

I would prioritise helping my child with a house deposit. It was hard enough forty odd years ago when we started out but that's nothing compared to now so I'd be glad to. As long as I wasn't cleaned out I'd do it, I have my pension & husband's pension so should be ok You'd probably find you could travel as well as giving some of the deposit.

I'd hope that later on, my child would help their children in similar way.

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