Helping kids on property ladder

[Lm1981]

All signs are that house prices go up over the long term. As mortgage/rent make up a huge portion of wage are you planning any help for kids? Even if kids are still very young does it cross your mind of something to start now?

@Geneve82 I’m not quite sure why you don’t believe me! Most of us have bought in the 200-300k bracket on 2 salaries of 25-40k and having saved dribs and drabs throughout uni and then much larger amounts after.

Of the top of my head this has bought:

• A three bed terrace in a nice family friendly suburb of Manchester
• A three bed terrace in an ok commuter town in Surrey
• A two bed terrace just outside of Winchester
• A two bed flat in a fine part of Oxford
• A very nice two bed flat close to Edinburgh city centre

It can be done independently.
As a widowed lone parent l am in no position to help financially.
But my sons are highly driven and on track, my eldest left school at 16, went into various apprenticeships, he is now 22 working full time in finance as well as studying for exams. He helps me out with rent and will be in a position to buy a 3 bed semi, locally, in pretty decent area in three years, age 25.

We helped our eldest with house deposit. Downsizing so will be in a position to do the same for youngest too.

Yes. In fact my 20 year old is living in a house I own. He doesn't pay me rent (minimum wage job), but he pays all the bills - utilities, council tax etc. Once I pay off the mortgage I'll sign it over to him. It's very small but he could have a small family there and it's a lovely location. Definitely needs a bit of a refurb though!

i think simply you and i have different definitions of “huge swathes” of the country are available to first time buyers of £200-300k houses in their mid twenties.

very different definitions

• *A three bed terrace in an ok commuter town in Surrey*

oh dear!! this is my neck of the woods.

i’d love to know where!!

@Geneve82 I’m not sure where ‘huge swathes’ has come from because I didn’t say it. However, 200-300k will get you something in most parts of the country… What is your definition of ‘huge swathes?’ There is still a lot of country outside of the South East! I also never said one could buy in the nicest of locations. I think it’s pretty normal to work your way up the property ladder. I gave a handful of examples of real couples I know, all in different geographical locations. You just have to pop on rightmove to see you can get 3 bed terraces in commuter parts of Surrey for 300k …

I'm about to inherit about 100k and I plan to use some of it as a deposit to buy in a cheap area of the country, the rest I will give to the children so they can do the same.

I don't want my children to have to wait until I die to get on the property ladder and I don't want them to be disadvantaged if I end up pissing the money away like my father did.

not huge swathes apologies

still large parts of the country

surely you are aware of the financial news and indeed mainstream general news to acknowledge that there is a huge problem with young people and indeed much older than young… not being able to save the deposit required to purchase a property due to the gap between housing prices and earnings.

Surely?

average age of first time buyer now stands at 37

Perhaps our wires are a little crossed. I was just focused on trying to prove it can be done without parents being relied on to make large financial sacrifices that eat into their own security, because it can. Obviously not everyone can do it independently but also many parents can’t comfortably help. Downsizing isn’t an option in parts of the country without significantly reducing quality of life (my parents live in such a place) …

Of course I know how hard it is, how housing supply is limited, how expensive renting is etc. It’s a real tragedy. I strongly subscribe to ‘the housing theory of everything’. Was just trying to offer an alternative view that it isn’t completely hopeless ..

The seven year rule is inheritance tax not ‘deprivation of assets’.

How would I prove to you what we are going through with the council? I won't (obviously be sharing emails and letters in a public forum).

The rules seem very open to interpretation and a bit of a lottery in terms of how hard a council will work to proove that assets have been given away resulting in an impact on the council having to pay for the care.

A much tighter, more investigative system going forward as councils have so much money to save and currently overspend so massively on adult social care.
My council has £70 million to save, due to cuts in the budget from central government. It also has a huge overspend on adult social care.

I don't know where ‘we’ all expect the money to come from to fund care.

@Applesaarenttheonlyfruit

@DahliaJ is correct in my experience, our local authority has millions to fund and us doing incredibly rigorous checks right now.

Incredibly rigorous checks? Yes of course and quite right too.

My experience is that people start gifting when they see an issue coming. That is an issue. Can the local authority challenge gifts, can they vigorously pursue those seen to creat a deprivation of assets, aware they may need, or have an expectation of needing care? Yes. Can they make a deprivation case for a healthy older person, say late 60’s, early 70’s taking reasonable steps with their own money? No.

I am fully aware the 7 year rule is IHT @DahliaJ, I used it merely as a legal parameter, to illustrate a reasonable timescale. The LA will use 7 years of records, but it’s not an unending time frame.

I was just focused on trying to prove it can be done without parents being relied on to make large financial sacrifices that eat into their own security, because it can.

i don’t my think anyone denies that it’s possible and some do

but the overwhelming majority of those in their mid twenties these days on £25-40k a year (even if dual income couple) will not be in a position to buy a £200-£300k terrace without parents financial support

I didn’t save money for my children to buy a property when they were small as we were always struggling to pay the mortgage ourselves.

But I got an inheritance in my 50s and basically gave my children that money - 200k each. One used it to put down a deposit on a flat, the other one has it in savings.

Everyone does things differently and obviously you can only help your children financially if you are in the fortunate position of being able to without putting yourself in hardship.

No.
When I gifted the 200k deposit to my daughter for example, it was all done through the solicitor she was using to buy a property. I had to sign something to say it was a gift not a loan and provide evidence of where the money came from ( an inheritance).
No mention was made of deprivation of assets as some people have mentioned, but then I was only 56.

In the last two years this has started to weigh heavily on my mind! I’m a single parent and parent no.2 has nothing do it’s all on me.
Things I plan to do:

Will encourage my child to only go to uni if they have a clear career path and very good wage at the end.

Think they will more likely do a trade so I may pay for a fast track course to hopefully get them earning well by late teens.

let them live at home for free for 4/5 years but take 1000 a month for a later house deposit.

Encourage and teach the importance of being financially independent and sensible.

Not sure there’s much more I can do than that. Wish my parents had done that with me!!!

Quite agree and think that @Dingledanglebangle may be unaware that some of her friends buying in more expensive areas may in fact have had help from the bank of Mum & Dad without necessarily wanting to tell everyone about it.

It’s one thing in Manchester, quite another in Surrey!

You’re doing great and please don’t compare yourself to others. We were only able to help ours this much because of a big inheritance.

Would also encourage your child when adult to open a LISA if they still exist at that time. For every 4K they save the government adds 1k so they are a good way to save for a property deposit.

DC1 left home at 19 into rented with his GF. No financial help from me, I wasn't able to. Nor did GF receive any help.

They saved for the rental deposit, both had NMW jobs, paid for their rent, bills, etc. They are both 24 now and have owned their own house with a mortgage for almost a year. They saved for the 10% deposit for the mortgage by working hard. The mortgage is a 40yr term, but they've done it themselves. And they're in the SE.

I don't understand the angst about young people not being able to afford to buy. It absolutely is possible. It just takes determination, hard work and saving. As it did for me.

Please look back through my posts - I’m slightly bewildered at the disbelief that we all did do it without help!

@Twiglets1 the examples I posted are from
close family or friends - I know the circumstances. If you see my initial post, I was just genuinely surprised and interested at the comments here as it’s not my own experience and we all managed without it. I then gave more detailed examples due to subsequent disbelief. I’ve stated clearly that I do know it’s hard and that I obviously lovely when parents who do help can help.

We gave our eldest 3 kids £50K each for a deposit. Youngest dd19 still lives at home, working ft and spaffs all her wages on going out, gig tickets, make up and clothes. She pays us £200 a month for her keep. I’d be inclined not to charge her if she was more sensible and saved, but I’m not subsidising her heady lifestyle. When she grows up a bit and eventually settles down we’ll give her the same money for a deposit but I wouldn’t offer it to her yet.

ETA. We also made it clear that we can’t afford to contribute to weddings or other large expenditures in the future after gifting them so much. We can’t do it all, but housing is the priority.

@Dingledanglebangle Sorry! I wasn't including you in my post, obviously! I just don't understand why people think it's impossible to achieve. You and I did it, my DC has done it. Just have to want it hard enough and save hard enough.

I'm always a bit confused about people downsizing to release cash for the kids - are people really leaving their 3/4 bed semis to move into terraces or flats? Which quite often will become problematic as you get older.

I know my parents recently sold their 5 bed to move into a 3 bed bungalow and had to find extra money to buy it 🙃