To help daughter with a mortgage

[WTDAC]

My adult (25) daughter lives with us (mum and dad) and saves £1000 a month by doing so.
She wants to move out to live with her boyfriend (super steady, been together for years, he is lovely, he earns well).
London rent would be approx £1500 a month between them.
If I gave them the money for a deposit (£50k, from an inheritance) they could buy instead and put the £1500 'rent' into a mortgage.
This to me seems a no brainer, but am I missing something?

If you can afford it why not. Have you got other children? If you can afford to do it equally for all kids you have, I can't see a problem.

Yes but if they split up the boyfriend will
Get half of that 50k

Have you considered giving me the 50k instead?

Is it the right time for them to buy?
Sometimes renting is right.
Sometimes london properties lose value or stagnate - if they might want yo move out of london to achieve more space for a family in a few years time they may be better off if they can just give notice to a landlord rather than having the stress of trying to sell.

Yanbu to want to help them but don't assume this is the right time for this help.

Nice to see a parent who actually wants to help their child for a change.
As they're only boyfriend and girlfriend at this stage, I would suggest the % you give goes in her name, just incase they split up one day.

They might not want to settle down in a particular area at this stage in their lives. Renting gives them the flexibility to move easily if needed for work etc.
Plus it's best if they try out living together without both being tied to a mortgage, unless the house is going to be in your daughter's name only?

If she’s 25 and saving £1k a month, and her dp has a good salary they must have a reasonable amount for a deposit saved themselves?

Do you have other children?
I think it would be sensible to ask your daughter’s partner to sign an agreement that he would not have a claim on the £50,000 should the relationship not last.

My parents have done this for me (twice) and it has been life changing. The first time I was single with no hope of getting on the property market so they helped me buy an apartment. Met my partner and we sold the apartment and they gave us money to put towards a house. Its all coming out of my inheritance. Their logic is I need the money now and that, hopefully, I won't need it when I'm older and they've passed. It's an amazingly generous thing to do and I'm sure your daughter will appreciate it.

You need to consider if this would be considered deprivation of assets if you were to need to go into a care home any time soon. (You haven't mentioned how ol you and DH are, so I don't know if this is likely).

Hi OP

Same here, really. Except I think you should research using the money for this purpose in relation to tax.

If you do do it, I think I’d want to get something in writing about getting my money out of the house in the event that they do split up, because these things can happen.

If you do have other children, can your daughter and BF afford to pay even a small amount each month to go into a fund for others?

It’s a very generous offer. I hope it works out for them.

Side note to say that each time my parents had to fill out a gift letter and it was only made out to me. So in the case of a split that would be taken into account.

Given DD is 25 it feels reasonable to assume a care home isn't imminent?

What's she been doing with the £1000 a month she saved by living with you?

I'm all for helping dc out, we did ourselves but she also put a good chunk towards it. I wouldn't be so keen to help if she'd spent it on handbags and holidays.

Yes, go for it, but once it is given, don't hold it over her or put any conditions on it. It is either a gift or a loan, so decide and stick to the decision.
Advise your daughter to speak to a lawyer do that when they buy she can ring fence the deposit and the rest of the mortgage is split 50:50. If they split up, she can get the % of the equity equal to the % she put down as a deposit and and the rest split 50:50.

They aren't married, joint mortgage at 25 isn't a great plan. Haven't you read the many, many threads about unmarried women getting screwed by splitting up with a mortgage? Let them rent first so they can experience living together first, sounds like your daughter is being sensible.

It can be protected for her DD - they just need to have the ownership that allows for each of them to own a different share, can’t remember what it’s called; joint tenants or tenants in common.

This is what a deed of trust is for. The conveyancer can sort that out during the house purchase.

Let them rent for 12 months together first - living together is a good test of a relationship and even with a ringfenced % of the house in her name (which she absolutely should do if you gift her a deposit) selling a jointly-owned home is a massive expensive pain in the arse and she'll have lost FTB privileges.

It's a lovely thing to do if you can afford it, but if you offer it now she might feel encouraged to do it because she can, without trying out living with him in general (in their own home, permanently, where they share bills, etc - all stressors on a relationship - unlike e.g. living together in halls or a student house or houseshare).

A potential alternative that would protect her from losing if they split is for you to buy as a BTL and rent to her. You’d need to research tax/council tax/capital gains implications.

No.
She's only 25 and they haven't yet lived together. Let them live together for a year or two and see how things go. They need to test the water first. What will his parents do to help?

If your dd were single and wanted help to buy a flat on her own and in her name I wouldn't hesitate.

Also, where in London will they rent a one bed flat for £1500? DS and then future DIL rented in London three years ago and it was £1800 for a one bed flat albeit quite central.

If he earns well and your DD has been saving £1k a month then why will they be renting instead of buying? If he doesn't have a deposit saved then I would be concerned about why.

If you want to give the deposit then make sure it is protected so you can get it back if they split up.

This is excellent advice. As long as the money is protected in the event of a breakup it’s a lovely thing to do. Just make sure you stay alive for seven years afterwards!

I would say to do it, but only with the deposit ring fenced but also as tenants in common rather than joint tenants.
This means that they own percentages each so for example
deposit 20% your daughter gifted by yourselves
40% your daughter & 40% partner & split bills & mortgage 50/50
You can actually purchase a place like this as friends & put clauses in place to cover if one wants to leave & timeframes to sell it/buy the other out.
I would just say that a conversation needs to be had to set this up fairly so that everyone knows what they are getting into & that everything is covered legally
I am hoping to help one of my children & a friend do this when they finish university

Let them live together in rented for 1-2 years first. Him being lovely as a boyfriend doesn't necessarily mean he will pull his weight round the house. If they are not going to go the distance then it's best for her to find that out before they buy a property, when they are more financially tied. Also let her know that you will welcome her back to live with you if things change.

Also unless your DD is an only child I would be considering how to gift a similar amount of money to your other children.