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.

They should have got themselves a nice inheritance then, shouldn't they!

Buy. It’s a good time to buy and shitty time to sell.
Look after you and yours, nobody else will.

Someone mentioned being slung out for DD to move in. Can’t happen after the Govt get rid of Section 21 which will happen very soon.

I wouldn’t with a labour government

This isn't all sound advice though when it jumps you up a tax bracket and have to pay huge taxes on it.

Stick the money into index accounts OP that's what I've done (I'm now 30) I had about 100k inheritance at 18, I am hoping to buy my long term home outright next year.

Flats come with huge ground and service charges. I thought about doing a BTL and renting it out with no mortgage on, but the fees and taxes I'd pay, plus all the insurances and if anything ever went wrong. It's very hard to be a landlord now and there's a reason why everyone's selling up. It's simply not that easy just to 'rent it out until she's ready'

Put it in the right accounts and wait until she's in a place to buy her first home and give it to her then. Done tie it up in property when she's 18.

No, it would be better for you to get a joint mortgage with her - she has the benefit of age, you have the benefit of a good credit score/history.

Did the same with my dad when I was 19. He wouldn't have touched a flat though - leasehold = fleecehold.

Why not buy wherever she goes to university and she can live in it? Student accommodation is eye wateringly expensive, so she would be saving a lot if she could avoid that. Maybe even rent out another room if that's possible.

Remember, nothing makes you more popular among your peers at university than when mummy and daddy have bought you a nice flat and you charge your friends to live with you.

There's always one, isn't there? Surely we all like to do what we can for our children, whatever their ages. I think most of us would buy property for our adult offspring if we were in a position to do so. If a flat is bought with the intention of being for a young adult at a future date, but rented out in the meantime, what is wrong with that? It gives people a home who need one and makes some income at the same time. Sounds like a good idea to me.

It reduces housing stock for buyers and raises prices for everyone. We have a housing crisis in this country partly caused by selfish, thoughtless individuals treating property as investment vehicles, not as homes.

Wow. Wish I was your DD. Lucky girl

Buy a flat for them and rent it - never let them live in it.

Think long term in all scenarios.

If you buy them that flat and they live in it and get married the flat becomes the marital home.

If they get divorced half of that flat is gone regardless of how they bought it.

However if you keep it as an investment property and never live in it, it's a bit of income to go alongside their main job.

Then they can meet someone else and buy a house together if their own. All the while they have an income from the flat.

If they end up getting married / divorced. They will be able to keep the flat & entitled to half of the marital home.

If you do buy a flat and rent it out, you should research the changes that are coming for landlords in particular ban on no fault evictions which may make it harder for your DD to move in.

Personally I'd stay invested in the stock market- far easier, less stress, and more flexible, then let your daughter buy herself somewhere when the time is right. Whether the stock market will outperform the housing market or vice versa, who knows?

This.

I was a landlord until a couple of years ago. My tenants lost their jobs just before the pandemic and didn't pay rent for months on end and I couldn't get them out because simultaneously I had a very major problem with the property which i couldn't afford to fix because theywere so much in arrears. I couldn't evict them due to the repair not being done. Nightmare! I had to sell at a very reduced price .

All that, we do.

She will rent it out and pays tax on the income. I’m an accountant. I will do her taxes anyway.

i would very much prefer keeping the money invested. It’s easier and less hassle. I’m just worried about house prices goIng up like crazy and pricing my kids out of the area.

thanks for this. I didn’t think about this scenario,

Rental legislation is changing shortly - what if you can't get tenants out?

Buy in her university town
saves accommodation fees, sell on when she's finished, or keep it as a rental.
consider spending more than her half, she can find a flat mate.
By the time the youngest reaches 18, you'll have sold the larger flat on & hopefully repeat.

It’s no where near universities. She won’t be living there until after uni.

The first time buyer stamp duty thing could cause problems later down the line too. If she meets a partner and wants to buy with them.

I would not buy in her name, it will mess up any access to First Time Buyer schemes that she would otherwise have been eligible for which might be of more use to her.

I might consider popping some in a SIPP for each of them though so it can grow.