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.

I live in Denmark Hill. Depending on where the flat is, it might have costed anything from £550-750k. So, £325k from mum and dad, then 4x his salary, would mean he has a salary of £50-100k. Which is a pretty good salary for somebody in their 20s.

If he was actually struggling, he could have bought a two bedroom flat in Forest Hill outright for £325k (my brother’s flat is on the market).

I got nothing and did eventually manage to buy a house in the south east with my partner in 2019. 95% mortgage helped. It was very disheartening though when so many friends got money from their parents.

My mother gave me 100k for my 50th which I put aside immediately for my daughter rather than put on my mortgage. She’s 21 and when she’s ready I’ll gift her that money plus 50k of mine to give her a hand. In Sydney 150 won’t get her anything but it will help and add to what she’s saved herself. I can’t imagine not helping her in any way I can. Isn’t that just a part of parenting?

I'm still at home and have just turned 40.
I am single, live near London, have chronic health issues and will not be receiving any family help.
I work but earn nowhere near enough to buy a place of my own. I know many women who have higher earning partners who pay for the mortgages on their homes. Without them they would also be stuck at home, yet nobody judges them.

The MN answer on here is 'Why on earth don't you get a flatshare?' One forgetting that many have age limits, secondly they are extortionate and thirdly you can't save to move onto anything else and nobody wants to flatshare until they die.

MN is full of wealthy people who can't understand this. In terms of the OP, why not? If you can afford to do that for your adult kid then surely that works well for everyone. The parents in the article are correct with what they say.

We have helped all 3 of our DDs to buy in London (one in Denmark Hill as it happens). They are very aware, as am I, of the great divide that exists between them and most of their friends who don't have parents able to help them in this way

floral2027
For all of my children's school years, most of my earnings went on paying nursery fees and out of school club fees. It represented a huge drop in our household income. My friends who had parent living near by got free child care from family, lucky them. That meant the house we could buy was much better than the house we could buy. So - they could buy a bigger financial asset than I could. So really, it may seem 'indirect', but it is a very real financial asset.

We have always had differences in housing - always had differences in property prices across the country. Frankly every day the choices we make freely or by circumstance, reinforces these differences eg how many children you choose to have, when you choose to have them, whether you spend or save, whether you work or don't, whether you stay in education or don't etc etc

Actually according to ons, 63% of households in England owned their own homes in the 2 years from 2016 to 2018. It is around 75% for the older generation.

Home ownership in Britain has become a hereditary privilege - on.ft.com/3BiHyOz via @Afterrain

Yes high home ownership rates are a relatively new phenomenon but we used to have far more social housing so not owning was less of an issue. For our generation, it is home ownership, living with family or precarious rental.

Another stat from that socialist rag we call the Financial times:

In 1980, almost half of 18 to 34-year-olds in Britain and America lived in their own property with children of their own, making this the most common arrangement for young adults. Today that is true of only about one in five, and the most common set-up for 18 to 34-year-olds is now to be living with their parents.

It won’t, but I do think it teaches you to budget/appreciate money. I worked through uni, lived on beans and rice, cycled everywhere (still do, I like cycling). DH was always given a generous allowance even when he was working. Our attitudes to money/work now are polar opposites.

Of course not getting essential housing help contributes to mass social downward mobility in the form of lifelong renters.

How long before people realise that a) rent is your biggest life expense b) the council pays as long as you don’t work.

My parents could have helped me - and didn’t. They were bought a house by their parents in the days when £5k got you a family home.

Big inheritances went to DP not their DC/DGC - Mummy & Daddy kept the lot for a lovely lifestyle.

Mumsnet would highly approve. You’re on your own! is the site’s war cry too.

Upshot:

I rent a shoebox miles away from family. DB and his DC emigrated to Scandinavia for a better life, which they have in spades & where he now owns a home.

As time moves on, DP don’t see much of the family, for obvious reasons. They’re too old to manage their large home or look after themselves now.

DP are being put into a care home shortly - they wouldn’t downsize which would have avoided that.

The house is worth about half what they think it is cos they haven’t maintained it in their old age.

The care home will have to be inexpensive. Visitors will be rare.

In 3 months DP will be much poorer than they would have been had they assisted their family to stay around.

Now they’re alone too.

Yanbu. I have no idea how future generations on average salaries will ever afford to buy. I read today that nationwide is starting to offer mortgage loans of 6 times a person's salary. 6 times! With the average salary being £35k, this is a £210k loan. The average uk property price is £282k, so someone would still need to gwt hold of a £72k deposit. Without being gifted/inheriting £72k (plus fees), how long would it take the average person to save such a deposit while simultaneously paying out extortionate rental prices?

Soon the banks will offer 7 times, then 8, 9, 10 times your salary. We will be so grateful for the loan but we will be working into our 80s, 90s or to our deathbed to pay for it!

Yes, but that assistance might vary from £500 to help pay legal fees to paying the full property cost, which is very different

At least you can buy the house then albeit a smaller house. The point is in the next few years, many people wouldn't be able to without a gift from parents.

This would totally disenfranchise a segment of society and frankly I don't blame them.

Personally I think a massive council house building programme would go a long way towards reducing inequality. Everyone should have access to really good quality, affordable, secure housing. Council housing shouldn't just be the absolutely last resort for the desperate, it should be available for everyone who wants it as a housing option. I think it was a big mistake of hospitals to sell off their staff accommodation as well. Council housing can be a long term money maker for the public purse as well.

The article says they got the girlfriend to help too.

Stop RTB
Build more social housing.

Increase supply.

Parents or grandparents will always help their children they always have done.
If not financially then with child care etc

Hospital accommodation is definitely needed.
Should be bought back.
Subsidies housing for nhs workers

The UK’s strivers and achievers now are banned from having a home because of who their parents are.

Many of them are working for nothing back. Too many. It’s absolutely right to stop striving, stop achieving and switch off.

Very high proportion of renters, for whole life, difficult financially in retirement. Those who buy use pension fund money for house deposit, mortgages never fully paid back (only small % of total must be reduced within specified number of years). Overall not great from financial perspective, but that's how it's done. And the 1m mentioned won't get you much - just a small concrete box apartment.

I'm late 20s earn just over £50k and I've been on the offer on the property in London zone for for 13 weeks and I've purchased for £280k I have saved quite a bit of money within the last year but the bulk of my money came from saving during Covid but since last October I've saved around £8k

I sucked up a really shitty flat share which was cheap rent but in exchange my mental health is now extremely bad and I've been sexually assaulted in my current place all for trying to save as much money to get on the property ladder as I just simply couldn't take another houseshare.

Houseshares in London now in zone two or three are over £1000 for something nice this is just quite frankly is unacceptable. Rent is the biggest reason people can't save for a deposit any pay rise is sucked up by a rent increase. Flat sharing used to be cheap, it is no longer cheap.

Personally I think a massive council house building programme would go a long way towards reducing inequality. Everyone should have access to really good quality, affordable, secure housing

There will still be inequality as people will still aspire to move out of council housing. We are fixated on home ownership in this country - Germany and Switzerland don't seem to have this problem. Two thirds of the population there rent.

Those countries have rent controls.

Those countries have rent controls

And that is what we need in this country. It's the lack of rent control that is much more of a problem that's parents helping their children.

The big problem is well paying jobs are where house prices are higher. Always have been. Plus areas become “up and coming” and change. Just look at Sheffield!

We gifted our DC substantial sums and we have a huge IHT liability so they will get more as we try and reduce that. When we bought we got £0 but that was then. The Telegraph says they live in the Channel Islands - low tax there I think. Like them, we rejigged our investments but I’d rather dc have our savings than the government.

Housing has always cost more in London. DD1 has a mortgage of £325,000 on her own at now 31. Has had that for 5 years. Some DC do earn well in London. Most of her friends are buying but some as couples.

This is the most horrible, pitiful bubble that is literally going to burst in the next five years or so.

For the last 15 to 20 years it's been a given that young people can't get on the property ladder.

Now, in the last two or so years, in the south east anyway, young people are even struggling to rent.

Our estate agent is in his early 30s in the south east. He's in bed by 9.30pm and at his desk by 8am. I teased him that he should be out in pubs drinking and enjoying himself, but it turns out he and his GF just can't afford it and may as well just go to bed.

When I was his age in the same town, we were out four times a week - pubs, restaurants and clubs etc. Rent was just not a factor in determining our lives.

It's so utterly different now and so sad. I really, really feel for young people.

Rent controls and caps should be bought in immediately.
Long term tenancy where rent remains fixed for say 5 years.
Rent can not go up past levels set by government.