To think that parents "helping out" their kids to buy property, just keeps house prices high?

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So, a LOT of parents help their kids buy houses these days, as property is expensive.

But surely it's only expensive because people keep buying it at that price?

If these young adults can't afford a £30k deposit, they couldn't buy the houses, and prices might fall because of it?

Or not.

But still, it must be compounding the issue?

And also, maybe, people's expectations are 'too high'? Why would (say) a single 24yo need a 2 bed semi, when maybe a cheaper 1 bed flat would do? Maybe that's a different discussion though?

Bought for the 1st time 2 years ago at 45 couldn't have done it any earlier. Scrapped together a 5% deposit over more than 5 years and it was not easy.

No money given or inherited.

"But surely it's only expensive because people keep buying it at that price?"

In fact almost anything that's done to help buyers has that ultimate effect (not that I'm advocating nothing is done). As has been commented before, we don't actually have a housing market we have a mortgage market.

Because IMO it's the wanting to make a profit that drives the prices up.

But an individual doesnt set the market value. We bought our house 14 years ago (admittedly I think the estate agent under valued it) and have done work to it....so even if we sold it for what we paid plus the cost of renovating it, we would have to buy somewhere half the size or in the middle of nowhere! (And DH is a DIY freak so did most of the work himself....do we charge for that as if we'd paid someone to do it?)
I think part of the issue of housing shortages is when the right to buy council houses came into effect, the money should have been invested into replacing those houses so the amount of council and LA accomodation stayed the same.

No use, isn't this a reflection of high expectations? I grew up with my mum living in a one bedroom flat until I was 8.
If two parents are sharing one bedroom with a child, the property is overcrowded. Anyone planning to have a family needs at least 2 bedrooms, possibly 3 if they plan to have more than one child. I don’t think it’s “high expectations” for someone living in a western country in 2020 to expect a home that’s not overcrowded.

@dontdisturbmenow actually we do have a deposit saved!!! The problem is that houses are still so expensive! And with Brexit we got scared of making a move.

I do know a lot of people though that couldn't get good jobs after uni or have to spend so much in rent that they can't save for big deposits. The idea that people think parents shouldn't ever help their kids (especially in the present economic situation) is insane. Then they complain of 30 yo still living at home...

People don't always realise how much help some "independent" adults have had to make them "independent"

The idea that people think parents shouldn't ever help their kids (especially in the present economic situation) is insane. Then they complain of 30 yo still living at home...
And I think its a terrible attitude to rely on your parents to support you with your life choices.

Choices which include getting a pt jobs whilst still at school, going or not at Uni, making the best of your 20s rather than saving, having kids before buying a property, wanting a first property with more bedrooms than needed, a garden, on an nice street, in a nice area, ie. a property that can't be afforded.

All these will have an impact on one's ability to save and get on the ladder. I never expected not needed my parents to help me and my kids actually would hate that I have to help them but so far, they gave all make choices that include many sacrifices that will see them able to buy a property at some point of their lives without getting my financial support.

Saying that, nothing says I never wouldld help, there are some unexpected circumstances that can't be helped and I certainly wouldn't want them in the street but there are no expectations on their behalf.

With demand massively outnumbering supply, young people not buying wouldn't lower prices- there is always someone needing a property and willing to pay. I sold my 'starter flat' (nothing special in a ropey area) had 25 views and sold in 1 day. We then lost out on 12 bidding wars to finally get our current house- it's a 2bed terrace!

Yes it definitely pushes up house prices for First time buyers as certain first time buyers have more money to offer then someone without that help and so they are then competing with others who have got financial help and sellers can ask what they want, if bank of mummy and daddy was banned prices would come down alot, it is just like the help to buy scheme which has been proved that house prices have gone up as a result as they have more money along side their mortgage to pay more for a property along with every one else, those children who need help from mummy and daddy for a house deposit have failed in life in my opinion, should save up like everyone else, how they can have any pride is beyond me, its hilarious down the pub when they brag about how they have just brought a brand new 3 bed semi and then you ask them where the deposit came from and they quickly shy away, I allways say your parents brought you that house you haven't sacrificed or worked hard for it like most other people without help will have to, bit like having a golden spoon whilst growing up

I had lots of help and so did a vast majority of people I know who have bought. Once of my friends was given over £600k As a gift. The other things is it allows you to evade inheritance tax so long as you don't die within 7 years.

Although I have benefited it is totally unfair that we are now in a situation Where parental wealth dictates you place in the world. Like we have gone back in time. How are people supposed to save for unreachable deposits when all their spare cash is going on rent and debt? Help to buy creates more debt.

@Laufeythejust

We are in the north and we had help from DPs parents. They gifted us £30k towards the house. We would have still bought a similar priced house but it would have taken us another couple of years to save. It has meant we can get married sooner and have children sooner so we are really grateful to them. I don’t think the issues surrounding house prices are the same in the north vs south though (at least not where I am).

I understand having a house means you have apace for children but not how it affected your ability to get married.

I hate to say it but one of the things that has driven prices up over the years is women working more/earning more, especially after having children.

Maternity leave used to be so dismal that many women gave up work after their first child, or just worked as dinner ladies or similar.

Decades ago women didn’t earn as much and couples could afford a house on one wage.

Back in the 80s or so, lending for properties was based on 3.5 x the main earner’s income.
Women declared that it wasn’t fair to assume that they’d be staying at home once babies arrived and so some legislation declared that both incomes should be used in assessing mortgages.
Consequently house prices suddenly soared.

I worked in a bank in the 80s. We saw this coming.

What we didn’t see was the proliferation of landlords buying up scores of properties and charging in excess of mortgage repayments for rent.

low interest rates haven't helped

It’s tiny issue. Parents can either help with a deposit or just gift cash. Effect is the same.
The real issue is property developers buying up housing stock for huge profit by charging high rents or reselling at significant profit after minor cosmetic changes. It’s also tacky new home builders inflating costs.

It's not a new thing. I bought my first flat in 2001. My mum gave me £16k for the deposit. Everyone I knew was getting up to about £25k then. I'm hugely grateful to her - I've moved twice since then and that money has enabled us to have a much bigger house now than we would have otherwise been able to afford.

If you have the money you will help your child any way you can, nothing is gong to change that it's human nature.

its hilarious down the pub when they brag about how they have just brought a brand new 3 bed semi and then you ask them where the deposit came from and they quickly shy away, I allways say your parents brought you that house you haven't sacrificed or worked hard for it like most other people without help will have to, bit like having a golden spoon whilst growing up

And you actually have some friends left in said pub? Amazing.

Unfortunately OP, what you call a 1 bed flat, developers and estate agents call an executive apartment, and it gets slapped with the same price tag as a 2 bed terrace in my town along with a £150 a month "service" charge.

No, I blame the money lenders. It used to be max 3 x salary for mortgages over 25 yrs. I also blame the sale of council housing. Less properties available, only the neediest families are housed. Council housing is renamed “social housing” and seen as somewhere to avoid. Everyone is obsessed with buying a property because there is no real alternative, secure, life long tenancies are virtually non existent. House buying has always been expensive.

Anyway as a parent, what should I do with my money rather than helping out my adult children? Apart from giving it to charity what should I do with it ?

If I can I absolutely plan to help my DC’s out with a deposit. It’s only a leg up, they have the rest of their lives to “work hard for” paying off the mortgage, I want them to have affordable housing. It worries me that they won’t.

Yeah I know a few people in my field (I know their annual salary) who would not be able to buy their house if they didn't receive help from parents. A couple bought their first home for over 600k, and another person was given £300k to contribute towards a house.

And I don't see why not

Why would (say) a single 24yo need a 2 bed semi, when maybe a cheaper 1 bed flat would do?

Looking at myself and friends (mid/late 20s & early 30s)

• the second bedroom can be rented out to a lodger, which then covers all / most of the mortgage and provides a financial buffer
• couple of us are dog owners - and one bed flats with a garden are like hens teeth, so you're automatically looking at 2/3 bed homes just to get the garden for the dog
• people planning ahead for having kids, and not wanting the upheaval and cost of moving again in a few years time

Worse in which way? When I got my first ft job after Uni, I was just happy to be able to rent a place. My furniture was throw aways, my TV about 10yo, my car even older, and holidays abroad was what I aspired to.

I'm in my late 20s

• the furniture all belongs to the landlord / hand-me-downs / was bought second hand, usually from Gumtree or charity shops (some bits have been lucky enough to get a lick of paint)
• the TV was a very generous Christmas gift a couple of years ago as I had never owned a TV before then - I was 27 when I got the TV. It's also worth noting that TVs have gone down in price a lot over the years.
• I only got a car last year - a 15 year old hand-me-down hatchback which I only use because I need it to run my business - mainly hauling stock around. Prior to that I had always used a combination of my bike and public transport.
• I haven't had a holiday abroad in 2.5 years - and the last one involved sharing dorms with strangers in backpackers hostels for a week in Spain. This year the holiday (plans not affected by COVID, it was always going to be a staycation) is splitting a holiday cottage a couple of hours away with friends, at a cost of £58 each - extravagant, clearly.

And yet I still can't afford to buy a home. Would you like to identify which part of the lifestyle described above is extravagant? Note: I am renting in a grotty area in a relatively cheap part of the country where armed police raids are pretty much par for the course (I can think of at least 3 armed raids in the last two weeks within a ten minute walk of my home - and those are just the ones I know about). One of my neighbours this evening was telling me of his tangles with the police, time in prison, and how he can only walk his dog at 1am because it's liable to bite strangers. Spice zombies and injecting drug users are par for the course. My own home has chronic damp, present in almost every room. Mumsnet naice it really isn't - yet my foreign-dwelling landlord is still charging through the nose for the "privilege" of living here.

I'm resigned to the fact that my only real hope of being able to buy is that one of my close relatives dies without needing to go into a care home, and leaves it all to me. Fat fucking chance.

It's not a new thing: MIL had a large gift of money towards her first house from her parents.

We've helped our son buy a detached house with a garage, and will help his sisters too.

Parents have always done this. 🤷