Telegraph article - ‘We gave our son £325k to buy a flat – or he would have been stuck renting forever’

[floral2027]

https://archive.ph/JujMC#selection-4141.0-4152.0

It found that this year, 42pc of properties bought by people aged under 55 will have help from the <a class="break-all" href="https://archive.ph/o/JujMC/www.telegraph.co.uk/money/sons-13000-more-bank-mum-dad-daughters/" rel="nofollow" target="_blank">Bank of Mum and Dad,* *equal to 335,000 transactions. By 2026 that will reach £11.3bn.

'His recent clients include Rick and Linda Denton, who rearranged their finances to free up £325,000 to help their 29-year-old son onto the property ladder.
The couple, both 63, were keenly aware that without assistance he and his girlfriend, despite both having full-time professional jobs, would be stuck in expensive rental accommodation forever.

Rick Denton knew his son would be stuck renting forever without financial help
Their gift has enabled their son to buy a two-bedroom flat in Denmark Hill, south London. Their 30-year-old daughter, a lawyer, was given a similar amount to buy her flat in West Hampstead, north London, three years ago.
“We felt it was important to give them a good start in life,” says Rick, who has worked in financial services, and is now an investor, company director, and entrepreneur. “We wanted to make sure they got through university debt free, and could buy a reasonable property in London. We didn’t want them bowed with debt.”
But equally Rick and Linda, who runs her own public relations firm, didn’t want to give their kids a completely free ride. Their son <a class="break-all" href="https://archive.ph/o/JujMC/www.telegraph.co.uk/money/property/mortgages/lloyds-offfers-first-time-buyers-mortgage-5-times-salary/" rel="nofollow" target="_blank">borrowed four times his annual salary to help pay for the rest of the property, with his girlfriend’s wages also factored in.
The couple, who live on Guernsey, were able to finance their contribution by dipping into their investment portfolio.'

Am I the only one who feels that if this continues, the young (who don't have Bank of Mum and Dad) might be totally demotivated (and that the rest of the UK would also become the inheritocracy that London is as there would be a ripple effect).

I did benefit from the inheritocracy too (parents paid my university fees/london rent for 3 years, DH and I had rent free living for 3 years at his mum's house in London), but definitely not to the tune of £325k. I am mystified as to why the son needed such a huge sum to buy a 2 bed flat (I also bought a 2 bed flat in my 20s) and the only other alternative to such a large sum would have been an existence in precarious private rental forever. They also paid his uni fees too so the parental subsidy from age 18 was much more than 325k. Apparently average gift to London FTB (cash gift) is 70k as of 2024.

Maybe it depends on where you are? I have five kids, three have bought places with a partner but without ANY help from me (I don't have that kind of money, and certainly not times 5!) Another one is thinking of buying and one is in accommodation that comes with the job so doesn't need to think about it yet. We live in the north, but even so I haven't got the kind of cash to splash to 'give' them money for deposits or to pay for their Uni fees, as a single parent.

So it can be done without Bank of Mum and/Or Dad.

It's their money, they can do what they like with it as long as it's legal. I don't see a problem with this.

Unless you are ( through no fault of your own) stuck working to pay rent. Stuck in a crap job after completing a degree.

No. its fine really.

It will raise prices for those who don't have that. And for those who have a bit of savings to gift to their children, 20k will not stand a chance against £325k and those kids could be competing in the same market.

Am I the only one who feels that if this continues, the young (who don't have Bank of Mum and Dad) might be totally demotivated (and that the rest of the UK would also become the inheritocracy that London is as there would be a ripple effect).

I'm one of those people (although not that young now) and no, YANBU. The gulf between those who benefit from inheritance/family money and those who do not will become more and more apparent.

my worry is that the high earners without bank of mum and dad would be priced out of the expensive areas i.e. London/SE and they will flock to those areas where it is still possible for 2 civil servants to buy a starter home and then it would not be possible for people on more modest incomes to buy or even rent.

Exactly. I will be helping mine when they need it, as long as they are also contributing to the best level they can.

My dd is earning a standard graduate salary (low 30's) and she and her dp are looking to buy next year, SE but not London. No parental help. Meanwhile dsd is buying with her dp, she inherited £20k

These articles do not reflect the young people I know

More than half (63 per cent) of all mortgaged first-time buyers are expected to receive assistance from family to secure their purchase this year

I'm afraid l'll help mine with no thought for the greater good. My mortgage is paid, so I would rather pass any inheritance I am (un) fortunate enough to receive directly to my dc. I deliberately only had two so that I could afford to be able to support them. Dh and I come from big families, where cash was always tight - one income as mum was too tied up with kids to be able to maintain a career.

I can only imagine being in a position to give or receive that kind of money from my parents or to my children.

It just amazes me that people manage to accumulate that kind of wealth as it's so far remove from my situation/family circumstances.

My child is 2 and we have another on the way and I fairly regularly worry about helping her fund her future in terms of uni/driving/house deposits etc. my husband and I self funded all this for ourselves but it's nice to dream that we can make things easier for our kids isn't it.

I’m not saying it’s right or wrong but my situation is similar to the above. My parents were not from wealth but built a bit of money over the years through work and gave us a good childhood, nice holidays etc.

When I was in my 20s, one of my grandparents had a horrific accident on holiday that left them unable to speak, walk etc. They successfully sued the travel company and won hundreds of thousands. Sadly both grandparents died not long after so my parents inherited all that money.

They basically left that money as it was and didn’t touch it for anything as they didn’t need it. Recently my younger brother and I both were looking to buy homes with our spouses. We live in an expensive city so my parents gave us each £100k to help towards it. I think we would have really struggled otherwise and maybe had to move away somewhere more affordable and I don’t think my parents wanted that.

I can't imagine that the 63% getting onto the housing ladder with a bit of help are being assisted to the tune of £325k. That has to be a bit of an outlier in the absence of an inheritance?

The 325k is a london thing I believe. Average london ftb gets quite a bit less 70k.

I think it doesn't even account for the non financial help like rent free living- think my 3 year stint with my in-laws was probably worth 50 to 60k conservatively!

I think those kids would get an inheritance. The 325k times two kids was funded by selling off part of the investment portfolio

Me and my two siblings got £35k each + my DH inherited about £32k so that was our deposit plus £10k of our own savings and £10k that we kept for buying stuff for the house. I actually don’t know a single person that didn’t have some kind of financial assistance either from their own, or their partner’s parents.

DS, teacher and his girlfriend, a nurse, are currently in the process of buying a house in Hertfordshire. They would have like to have bought in North West London where they currently live (in a rental) and work but it was unaffordable so a commute it is. They are still buying something that is more expensive than our house as we live in a relatively cheap area which seems rather shocking.
The kind of money we are able to gift them wouldn't make much of a dent in the deposit needed so we've said we'll give them money when the house goes through to pay for furniture.
Even if I could afford it, buying them a house outright or even a significant portion wouldn't sit right with me. I want to give support but I want them to feel they have achieved this largely on their own.

Do you also count people who lived at home for free.

Well, that’s exactly what we will do to help our kids when the time comes. My parents helped us, we will help our kids - just how it works in our family. Why wouldn’t you if you have the means to. No good inheriting when you’re 65, you need money when you’re young!

@floral2027 i was referring to people being given sums of money but I would include those people yes - I just don’t know anyone that wasn’t given money

I can't even afford to buy my own place let alone one for DS.

He can live at home for as long as he likes while he saves up to buy, that's more than I had. We live in an affordable part of the country.

I want them to feel they have achieved this largely on their own.

@fussychica why? That’s the point in disadvantaging them if you can afford to give them a leg up? I find it a complete myth that the £2k you earnt by yourself feels better than the £100k you were given…I know which I would rather have!

I may be reading this wrong but I find this rather judgemental. I have 3 children (only planned to have two) and also come from a large family with no parental help. Unfortunately due to living in SE and having to feed and house those children I am unlikely to ever be able to give them money to buy a house.

Glad you can but people have more than one child for many reasons.

I don't know anyone who WAS given money!

Buying a property in Denmark Hill, London (average price £630,000) with a hefty loan from very rich parents is no example of anything.

At those prices and with that loan this man amd his girlfriend could have bought elsewhere. They were always going to be advantaged due to having wealthy parents.

YABU

I don't know anyone who was.