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AIBU?

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:
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CherryPavlova · 30/11/2019 20:35

We had no help at all.
Our children get quite a lot of help as they start out in adulthood.
Hopefully, we’ll continue to help them for a good few years yet.

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DownstairsMixUp · 30/11/2019 20:54

Nothing. My dad bought a house in London 1986 so could help me and my brother but it's gone mad now.

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dawnish · 30/11/2019 21:01

I had spent several years saving up over £20k for the deposit on my house when I bought nearly 5 years ago, but my parents lent me £5k, which enabled me to dip under the 80% LTV. This gave me much better options for interest rates. I paid them back over the next 2 years.

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DexyMidnight · 30/11/2019 21:08

I say this every time on these threads: why can't it be a loan? If you're talking about gifting someone 10-50k (or more in some parts of the country) of course that's a big ask.

My parents lent me money (really substantial sums) for both my first and second deposits and I paid it all back within 4 years.

They lost out on a bit of interest for sure, and I offered to pay a sum in lieu but they kindly refused. Other friends' parents have charged interest, which is fine - up to them.

I was earning well so could have saved up an equivalent sum over 4 years but a) I would have wasted tens of thousands of pounds in rent in that time (even just flatsharing) and b) prices were racing out of control back then.

I think parents who can afford to help should lend. If they want to gift that's incredibly generous but it shouldn't be expected.

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Alsohuman · 30/11/2019 21:11

I don’t think mortgage companies allow loans. Parents have sign to say the money is a gift.

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NoIDontWatchLoveIsland · 30/11/2019 21:22

Our parents each gave 5% of the value of our first flat, matching what we had saved ourselves. Some went on stamp duty & other fees. It meant we could afford not to stretch ourselves with the lender, also the better deposit gave us a marginally better rate. We could have bought it without the help tho, & both sets of parents were surprised how little difference it made on the interest rate.

We save for DS and DD but the money may pay for university rather than a house deposit (neither DH or I had student loans and felt it made a big difference to our finances in our twenties).

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TheCanyon · 30/11/2019 21:26

We don't even own a house, but have 4 dc we're desperately saving up for to help out. Our house buying plans went out the window years ago, sick kids in hospital for weeks at a time ruined us financially. Dh is 43 now and took a lower paying job to be a better present parent so feels all too little too late now.

We won't have inheritances really. Though we will inherit fils house in the arse end of nowhere, over 4 hours away from here and due to being the arse end of nowhere is worth fuck all. My dp's are off to europe to see out their retirement and I hope they spend every penny.

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AnneElliott · 30/11/2019 21:28

I didn't get any help, but my parents didn't approve of me moving out.

I plan to help DS in any way we can, but he's an only. If I get an inheritance from my parents then I will probably hand that to DS as I don't want to receive anything from them - for a number of complicated reasons.

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wonderstuff · 30/11/2019 21:31

My dad gave me 15% of the cheapest 3 bed we could possibly have got in the village we live in when he inherited. We were married with 2 children and had been renting for years.Then he died and bless him helped us pay off that mortgage and get a lovely home.
I'd like to help out my kids when they get older, seems only fair, and the gap between wages and house prices is now so huge its very difficult to buy without family money.

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Ellmau · 30/11/2019 21:33

It would be kind to help your DS with his deposit - but please don't use your pension fund (or on travelling either). You may well need that yourself in retirement.

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DexyMidnight · 30/11/2019 21:33

Yes Also human that's true but you just sign a letter saying it's a gift and you make no claim on the house. If you then privately decide to gift your parents £1k every month out of your disposable income what business is it of the bank's?

Before someone witters on about mortgage fraud, it's not. The bank haven't lent to you under false pretences, they need to know that if they need to call in there are no competing securities, and that's exactly what they'll have.

Your parents can try and sue YOU if you stop repaying the informal loan to them but that's absolutely nothing to do with mortgage fraud.

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Soontobe60 · 30/11/2019 21:35

We downsized as I’m about to retire and we have DD £5k towards a deposit in a £90k house. Had to sign a letter from her solicitor to say it was a gift. We also ‘lent” her the same amount when she moved in. We might or might not get that back 🤣🤣

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CassetteTapes · 30/11/2019 21:38

My mother convinced me to buy her council property with her when I was 20 and earning 11k a year in retail, promised we would sell in 5 years and I would take my share of the profit to be my own deposit. However by the time the five years were up I had moved out and had my DS, carried on paying over half the original mortgage as well as all my own costs. I paid half of home improvements even though I no longer lived there. She then point blank refused to sell up. Her new DP offered me a low amount to buy me out and I was trapped so felt I had no choice to accept as could not afford to keep paying the monthly amount (childcare etc). He won around £20k from me in this deal, he was 50 years old and I was 25 with a young baby.

These days my DM and her DP brag about how financially well off they are and as a result we don’t have a great relationship.

I will definitely be helping my DC out with deposits.

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Alyic · 30/11/2019 21:42

I was given nothing but gave my child £13k as a deposit, times have changed

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Furrydogmum · 30/11/2019 21:42

Our parents gave us 5% deposit between them, which was all we needed in 1995! We have given our working 21yr old a £1200 deposit in a lifetime isa and our student 17yr old a £1200 deposit in a htb isa - ongoing we are paying £200 into each every month until they need it to buy a house. I dread to imagine the monthly payments on a mortgage by the time they are ready to take the plunge!

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WyfOfBathe · 30/11/2019 21:47

We didn't get any money directly from anyone, but when my parents moved abroad they let us live in their UK house for well below market rent for several years, which allowed us to save a lot towards a deposit.

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TDL2016 · 30/11/2019 21:49

Help them with a family springboard mortgage. You provide the deposit, earn interest on it and get it back with interest after a specified number of years. Barclays do it and a few others I believe.

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Snufflesdog · 30/11/2019 21:51

I did not have a well paid job
But I’d worked hard and it wasn’t a terribly paid job either
I saved and saved and saved for a few years
No luxuries whatsoever
And i got a deposit and enough to furnish the house
We live in an expensive part of the country

All my friends said you can’t get anything for less than 300-400k
They all received help.

I bought a tiiiiiny 200k place in an okish area that was quite judged by many of my friends and family For both size and location
But it was a lovely little starter home

I think so many people expect a semi detached drive way and garage 3 bed as their first house and it’s unnecessary.

My experience of those who received help, is that they do not really recognise the help they received and the privileged position they are in. I wouldn’t want my child to be that person.

I now make enough that I could help my children. But I won’t. They need to know the value of hard work and learning to save. And the pride and achievement when they buy their very own place all by themselves

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everybodyneedsomebody · 30/11/2019 21:54

I now make enough that I could help my children. But I won’t. They need to know the value of hard work and learning to save. And the pride and achievement when they buy their very own place all by themselves

Smile

I’m with you. As mentioned in my previous post, I wouldn’t have felt comfortable accepting help to buy a property. Even during the many years where I assumed it was never going to be possible for someone like me and assumed I’d be renting forever. It was the most amazing feeling getting our keys and moving in knowing we did this all alone, it wouldn’t have felt right to have taken from someone else to do it.

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TinklyLittleLaugh · 30/11/2019 21:56

Our parents weren’t in a position to help us out when we were starting out, but when we were quite well established we inherited a lot of money from DH’s uncle, who had lived a very frugal existence, played the stock market and secretly stashed a small fortune in the bank.

It was an amazing boost and we have made it a goal to help out our children. Our house is worth about £450k. We can downsize to somewhere perfectly nice, just smaller, for £250k. Then we can give £50k to each of our kids for a deposit.

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Floralnomad · 30/11/2019 22:02

We didn’t get any help off our parents as they couldn’t afford it even if they wanted to . We won’t need to help ds as he is a fantastic saver and has plenty of money for if he ever wants to buy his own place .

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Purpletigers · 30/11/2019 22:13

My parents wouldn’t have been able to afford to help me . I am in a completely different financial situation and a lot of that I owe to my parents . I will support my two as much as I possibly can .

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CherryPavlova · 30/11/2019 22:17

They need to know the value of hard work and learning to save.

I’m not sure how helping your children get on the property ladder stops them working hard and learning to save? I think ours all work hard and all save hard. We’d just rather they paid off a mortgage than rented as soon as was possible. Our son used forces help to buy scheme that he would have likely missed if we hadn’t helped him with the deposit and furnishings etc.
They could have rented for longer and made someone else richer.
They could have bought smaller places and had to bear the not insignificant costs of moving at an earlier stage. As is, they are putting their housing costs into their own properties and can remain where they are for the foreseeable future.
Our daughter is likely to go abroad to live with her fiancé after they marry next year. It will be a stipend rather than salary for both of them, so we’ll pay mortgage for a year to allow it. It wouldn’t be happening if we didn’t think they'd be working far harder than most people can imagine.

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Alsohuman · 30/11/2019 22:27

We can downsize to somewhere perfectly nice, just smaller, for £250k.

Trouble is when you look at those houses, they just don’t cut it. We contemplated it, viewed a few houses and decided we couldn’t face it.

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Mummyshark2019 · 30/11/2019 22:34

Never received a penny off parents and paid for our own wedding. I have saved for university and focus on ds education to equip him to be able to pay for himself when he grows up. Just not having the burden of having to pay back a uni loan is big enough. Don't believe that things should be given on silver platters. They need to know that of you want things in life, you need to work. You need to strive and you need to push yourself.

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