Buy a flat at 18?

[Newname85]

My children are 16 (DD) and 9(DS). We have some money saved up (early inheritance invested and some regular savings into this pot) and might be able to buy DD a flat outright at 18. the money will be split equally, but DS’s share will stay invested until he turns 18.
Is it a good idea? Or is it best to keep this money invested long term until she finishes uni and gets a job and decide where to live? She plans to study finance at Uni, so she is likely to work in London, but you never know!
We live a nice town just outside London. 35min train into London Bridge and great schools. If we don’t buy now, I’m worried she’ll be priced out of the area with crazy house price rises.

I’d keep the money invested. If you buy a flat you will need to pay fees and maintain it.

I would absolutely buy! No question.

Buy it.

You can rent it out until she wants to either live in it or sell it to buy elsewhere.

Most investments don't keep pace with house price inflation.

I'd also do the same for your son now too.

View the properties as investments.

my friend has two buy to lets locally that are intended for her children. At adulthood, they can move in/sell/rent them out. You need to work out the numbers.

Definitely buy.

A colleague of mine bought a flat outside London with her brother at a very young age as they had inherited the deposit from neighbours. It was rented out whilst they went to uni and rented in their early twenties. When they wanted to buy they sold it and she was able to buy in London with the proceeds without a partner or a very high income.

Keep it invested, the return should be higher and you retain flexibility.

Not that this is determinative but you will pay extra stamp duty land tax if you buy it for her while she is under 18 as it will be charged as though you were buying a second property. At 18 when she buys it she will get first time buyers relief.

We did this. Obviously you or they won't know where their careers will take them but in our case they rented the house out.

In her name or yours?
Once she owns she won’t get FTB benefits again.

I would keep it invested for now, you never know what’s round the corner health wise or relationship wise. We have enough money to buy DS somewhere, but due to health reasons DH had to retire early and we are holding onto our money as we still need to live. We also fell out big time with our DS and whilst it’s all good now, we certainly are a bit more careful about giving him any money.

I wouldn't. Flats are a liability not an asset: leases, service charges and the ever-present possibility of having no choice but to pay out tens of thousands if the freeholder decides structural repairs are necessary.

Possibly buy a house as easier to rent and sell

Not a flat

And property generally always rises over the years

You need to read up on being a Landlord.

It appears the new government want to make things very tricky for them. A lot have already sold out.

I’m not sure about capital gains tax as well?

I’d consider investing the money for better returns. Your children can then decide where they’d like to buy their first property as FTBs.

We're in a similar position and have decided not to buy right now, mainly because we don't want to be landlords. I'm sure in lots of cases you have an agent to sort it all out and it runs smoothly but we don't want the hassle if anything goes wrong.

Ds has no idea what and where he might go next so we'll hang on for now. We dont want to buy something in an area we'll end up with no connection to. Although a year of paying rent might make us change our minds.

If we lose a bit comparing interest rates to property price increases then that's fine. Ds is still lucky to be in a way better position that most of his peers.

Buy where they go to university.

Yes this, its not complicated, doesnt need all the letting out and worrying about being a landlord

Then the daughter can study, rent free, perhaps get her own lodger if she wishes, and then she can choose what to do with it later when she graduates, sell or rent herself

It doesnt matter that she loses FTB benefits as another poster says, she has a massive benefit, she will be a home owner!

I wouldnt hesitate.

I would buy.

Use half for a flat and half invested!

Definitely buy! Rent it out till she's ready for it.

But have a serious conversation with her about cock lodgers. Tell her to say she rents it. My ex moved into the flat I owned and tried to take half of it and I'm watching the same happening with a good friend who was adamant I was wrong for telling her to keep her home ownership quiet while dating as "he would never do that to me". Financially secure women risk attracting a nasty type of man.

Buy buy buy

Buy it. I got my first flat at 21 in the days when you could get mortgages then and it was the best decision I ever made. So many of my counterparts didn't and really struggled to get on the ladder.

Thanks for the responses.

some clarifications:

1. Buying in DDs name, once she turns 18.
2. Can she get a mortgage without a job? I like the idea of using half to buy and leaving the rest invested.

You're never too young to start exploiting people who don't have what you have. If your 18 year old buys a property they don't even want to live in, they've taken a property off the market and given someone else the chance to pay them a nice fat unearned income every month. Great to see landlordism starting so early.

Who pays for ongoing maintenance or service charges/ground rent for a leasehold property? Who pays the council tax, insurance, utilities? Who pays the accountant to do the tax return for income earned if it’s rented out? If it’s rented who pays for making the property compliant with the hundreds of items of legislation landlords need to comply with? Who pays for the legal costs of you get dodgy tenants you need to evict?

Buying a property in this scenario is completely crazy (I say that as a professional landlord). Keep it invested in some safe/medium risk funds (having take good advice) and I absolutely guarantee your return will be greater than the property rental income minus costs

@Masterbeth As soon as DD wants the property the tenants will no doubt be slung out with nowhere to go at the drop of a hat.