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

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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.

Absolutely.

The issue is - those who are unable to help their kin will support any political party that penalises hereditary wealth.

Well DD did it all herself. She has just moved into her own flat in London. No help from anyone. She had saved and saved. She went straight from uni, to rented, five years later she has bought. She has done really well, well paid job, but not six figures.

I think this is common to many families.

The issue is that fewer and fewer families can offer meaningful help, or help that is sufficient to support home ownership. It's become out of reach.

I’m pretty sure people who are able to have always helped their dc’s financially since the dawn of time.

Dh and I have worked hard to give our dcs a nice life and when the time comes for them to buy property I’d rather help them now and see the benefit rather than see them struggling and leave the money to build up for when we’re dead.

Whether you gift your dc £100 or £100k it’s all relative - people help their dcs where they can and there will always be people with more than you.

Sounds a bit like the politics of envy to me, I can’t imagine giving a shit about what other people spend their money on.

Really rooting for this actor to get big time staring roles in Hollywood.

LOL brilliant.

I got on a rung of the ladder 9 years ago. All I could afford was a shared ownership flat, which are almost exclusively new builds in medium to large blocks. I bought a brand new flat and hoped it would help me to move up the ladder and eventually buy open market. The gov advertised it as a stepping stone.

Unfortunately the building developed defects and cladding issues transpired. The developers refused to admit liability. So now all the leaseholders are stuck in a block full of problems with an enormous service charge, and no one can sell. We are now in a position where we are having to take the housing association and developers to court, which is very costly and stressful for all of us.

I won't make anything from the flat and ultimately I'm in a significantly worse position than if I'd have rented al this time. There are thousands of other FTBs like me, the majority of whom are shared owners sold the dream of getting on the property ladder, stuck in effectively worthless properties they poured their life savings into, paying through the roof in service charges for the privilege. Many of them are living in unsafe buildings, or in flats that are so damp and damaged they're practically uninhabitable. It's a farce.

DH is a third generation Londoner. Grandpa was a garment worker turned black cab driver who bought his home as a newly wed. His parents got help buying their family home. The reality now is that of the 8 grandchildren, only DH (who worked for an investment bank when we bought) has purchased (we had a 15% deposit we saved from living at home but ultimately it was the salary that helped us borrow enough to buy) and he is also the only one who lives in London (the rest live in cheaper places or abroad).. His cousin (who lives in Germany) on the maternal side has also gotten the ladder as she is with a guy whose grandma bought a house together with them.

Many ordinary families who have been able to help their kids will only continue to be priced out with massive ramifications for society. Helped kids since the dawn of time but growing wealth inequality will mean life will become more difficult for the bottom half.

Only on mumsnet is it perfectly fine for the Bank of Mum & Dad to finance house deposits to the time of £10,000s (& tough shit to those who don’t have family wealth) while simultaneously criticising 20 somethings who live at home for ‘leeching off’ their parents!

I am the sole earner as DH is severely disabled so there’s no way we can finance house deposits for our 3 dc. We have managed to save around £12000 for each of them. Two have had cars bought & insured with this money & the £4000 put into a LISA. DS1 using some towards PG degree fees & rest into LISA. That’s all we can do & allow them to live here as long as they need to so they can save!

Private rent is a scam, more social housing
is badly needed. I grew up on a council estate as did most of my classmates. Majority had working parents paying rent, now it seems only a very few people get social housing & councils are paying out a fortune in housing benefit to private landlords. Governments just don’t seem to want to tackle the housing crisis and it’s just going to keep getting more difficult for each generation.

And this dear readers is why you should encourage your offspring to exit the UK.

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.

This is disgusting! Sheer greed from LLs! There needs to be rent controls & more protection for tenants! It’s unsustainable.

Hence the Renters Rights Bill.

That's really tough, @GenAvocadoOnToast It's hard when you to do the right thing and it backfires.

My parents saved for decades and scraped together £12k for each of their three children. They were proud to have contributed.

Name a time when this has never been the case? People who can inherit are always better off than those who can't.

It is the plot of innumerable Victorian novels and a fair bit of Jane Austen too.

We rented for 3yrs in London before buying. We had help from parents. Our rent in those years was 2k a month. Same standard of house is now 3.2k a month after the mini budget. Complete waste of money. Grateful for the help as paying that rent long term is unfeasible if there's a choice not to.

London has become unaffordable unless you have combined very high salary or generational wealth.

I received significant help to get on the ladder from my parents and part of my decision around the number of children I want will be based on passing this down. I don’t want to raise a child in London and then they cannot afford to stay there.

There was a time where it was possible for many people to get on the housing ladder through hard work alone. This is becoming increasingly difficult, especially for those who were unable to live at home in order to save and especially as a single person. So in that sense we are returning to a more Dickensian time.

I think this will be a growing issue going forward.when the divorce rate is 40%, it may be that 50% of many parental gifts will go to fund an ex and possibly a new family as many mortgage companies require parents to declare this was a gift and they will have no claim on the home..

So the actual benefit to your descendants will be diluted and depending on their financial situation then would they still have a stable roof over their head in a dysfunctional market and could you afford to buy them out again.

That's what happened to DH's parents, dh's grandpa had to help buy the ex husband out, good thing he never worked all those years or contributed to the mortgage and there were 4 kids. Also it was the credit crunch then so the house value wasn't so high even in London.

Unfortunately all I think the Renters Rights Bill will do is reduce supply. This will increase homelessness and further entrench disadvantage in that people from London (especially) and other major cities who can live with family will become the only once who can access the plum jobs as they'll have somewhere to live. What we need is council housing.

Agreed re your first comment.

Which is why we need to invest in social housing! Much of the population lived in council housing for a large part of the 20th century & the rent paid covered all costs to the local authorities. We should provide the younger generation with that option should they require it !

Please, NO rent controls. This policy fails everywhere it has been tried. It just reduces the supply of housing.

We should build more council housing, but we should allow more private housing to be built too. Not everyone wants to live in council housing.

So they were given £325k and then had to borrow 4x their joint salary too? For a flat? I know London is expensive but that's insane, especially since I'm guessing they're not on minimum wage. I bet they will then tell everyone how they got where they are through hard work and how anyone else could too with the right attitude.

I don't understand why people without kids do expensive rentals.

DH and I did room / house shares until we bought a flat in our late 30s so we could save money. Renting property has always been akin to paying a mortgage & you can't save money quickly that way imo.

This is very silly. People aren't just complaining because of jealousy (although on a personal level that might come into it!). What people are complaining about is the polarisation of society if wealth just gets passed down the generations.

Inherited wealth leads to an increasingly unequal society and makes things more and more expensive for those on very low incomes - and also puts them in a position where they are unable to help subsequent generations. I mean if you don't give a shit about mass inequality that's your right obviously!