How much for house deposit in 20 years time?

[Boohoo123456]

trying to plan for future and terrified with the way things are looking that my kids (age 11 and 1) will not be able to get a property.

how much do you think we will need to either save or release equity to be able to help them with a deposit? What is realistic? Atm it’s looking like young people will need a min of 130k for a down payment.

what’s everyone else’s plan?

im so afraid of where the future is headed. From what I’ve read, buying property will only be for the extremely wealthy and I want to help whilst I can…

Thank in advance

£130K?! Not in most places.
The cheapest (for you) and very effective thing for them is to let them live at home with you rent free / their exact cost only, for as long as possible.

Impossible to say and any claims otherwise need to be taken with a huge pinch of salt.

If you're expecting them to be able as single 25 YO teachers or nurses in Central London, then your £130k estimate is probably way under.

However, if they buy with a partner in a cheaper area of the country, they'll be fine with a normal 5/10% deposit. As for what that will be in £ terms, who knows? It could be more, less or about the same as it is now, when inflation is taken into account.

You never know, there could be some sort of revolution in the next 20 years where sufficient, good quality, secure, affordable rental properties are built, such that no-one wants to buy any more, because they don't need to.

If you have spare money, save or invest it for them. But don't do that to the detriment of today because you're 'terrified' about something that only exists in the imagination of some crackpot.

The issue with this is that it prevents their adult growth, independence and development xx

No it doesn’t! Why would it? What do you even mean by “adult growth”? They continue to live with you. They are expected to act like adults - that is, be courteous to others in the house and responsible for themselves. Exactly the same opportunity for “growth” as a house share. They are also expected to budget like an adult - just with their “rent / mortgage” budget going into savings towards the house.

If you can’t see the difference between living with parents and living with housemates / partner then I really don’t have the energy to explain.

Separating from parents is an important and fundamental part of growing up.

In case you’re interested in learning about why it may be detrimental …

https://tealswan.com/resources/articles/livingwparents/

If you can afford it, set up some sort of stocks and shares investment for them when they are young which can be added to and will grow over time so that it is a lump sum when they are older. My children have Child Trust Funds which were a scheme set up by the Labour government in the past and it is surprising how much the money grows over 18 years.

Gifting a deposit could also limit growth, and remove the need for adult DC to strive.

FWIW I have invested every spare penny since my DC were born so that they can have house deposits. There are hugely negative sides of doing this. One major one is that they will be resented by their peers who have not received deposits. You also risk creating dependency and a sense of entitlement. The adult DC may not feel the need to seek better paid work.

It seems odd to fixate on the growth aspect of adult DC living with parents whilst also wanting to hand them unearned money that will also stymie "growth", arguably to a greater extent and for a longer period of time.

I think living with parents can actually be a very good motivating factor to save up quickly, and a great many people would benefit from having to slum it for a while.

CroftingCarrie - I think it is a good point that gifting a deposit could limit growth and inhibit striving for themselves.

I come into regular contact with young people in their twenties and they often have a huge sense of entitlement.

Op it was very common for young people /families to start out in parents posh front room (humble house).

They worked and saved for modest accmd.
My own parents had to live separately until they brought a cavarvan.
They couldn't afford all the house hold basics. B
Maybe we need small readjusting on what young people expect when they move out.

@CroftingCarrie. There are downside to not helping them though.

Dc strive or don't strive whatever, it's within them. You will get rich kids who strive and rich kids who don't.
Sometimes dc can feel deflated and over whelmed with the huge costs facing them so any help may give some that impetus and drive to build on what they have.

It's like facing everest saying you need to climb that alone or here is a sherpa and guide.

I don't think blanket views help when each dc will have different motivators and depressors.
Life throws all sorts at us, cancer is raging amongst us, young people as well, divorce family break ups etc..

I think give what you can.

@RoseMarigoldViolet

Again it's so speficic eg my dc have good savings sadly from inheritance.
They are thrilled about getting their 100 from nationwide.
Another friends dc also have good savings and they aren't bothered.

For us, I’m assuming Ds might just live with us forever. Our house is designed that two households can live together or apart so it would work fine if he wanted.

You can buy a three bed house for under 100k still in some parts of the country!

Totally agree with this, my heart sinks when people propose young adults living at home for many years of their early adulthood. We infantislise young adults to our and their peril, it has been a huge backward step in society, for financial reasons

OP it depends where you are thinking of in the country, there are some places in the country where you could get a house for 100k, for 150k, usually around the Midlands. What would they be in 20 years time? you would have to try to do your calculations to work out the average increase and growth and then apply a 10% deposit to that.

I’m assuming it will be close to £100k. We’re aiming to save half so £50k for each of them.

I don’t think adult children living with parents is a problem at all with independence.

Where I live now it’s very normal to have multi generations live together. The older generation help with childcare of grandchildren, not full time but ie after school. The parents in 30/40s can live mortgage and rent free. They pay for all utilities and house maintenance in exchange, so the older generation have little to pay for. Everyone benefits.

Our neighbours have 4 generations still in one house. Everyone has own private areas also so it’s not just constant communal living.

@Boohoo123456 you’ve linked me to a far too long to bother reading unsubstantiated opinion piece by some lifestyle guru who is commercialising said opinions. The fact the first line on the main website talks about “authentic self” had me 🙄 from the outset. I did scroll through the article though - where they mention it’s particularly an issue with dysfunctional parents. I presume you don’t consider yourself that?

Like I said, treat your children as the adults they are and have the expectations of them to match that - they’ll still “grow”.

I can’t see how housing your child whilst they save fosters less independence than handing over £130K they’ve done nothing for. 🤷🏻‍♀️ Quite the opposite.

Hi OP,
While it is impossible to know what deposit your children will need what you can work out is what you can afford to save.

I wanted to open pensions for my children as I once read that compound interest means saving x amount a month from 0-18 will be worth more than the same x amount each month from 18-65. (I don't know if this is factually true but I get the idea).

Obviously this won't help with a house deposit at all as they have to be 55/57+ to access it - but I think similar principles apply to your savings as they are long term savings.

I chose FTSE trackers and for my eldest started investing just £20 each month. I chose the option where the amount automatically increases by 10% each year. When the amount got to £50 each month I stopped it increasing as I couldn't afford more. My eldest is 14 and his pension is 11k so far.

Long term share investment is recommended as shares usually outperform cash over the long term. Choose a fund that spreads the risk over many shares for you to spread the risk. Look for low fees as these make a huge difference over decades of growth.

If I was you I would save in my own name for complete flexibility - then if your kid has a good job/a partner and only needs 10k for their half of the deposit you can give them that - or offer to match what they save but if they need more you can give more if you can afford it.

If they want to travel/party/support a waster partner for a year or two they also don't have access to a great pot of house deposit that they can drain away.

I agree that being given lots on a plate can act as a disincentive to strive, and promising something and then backtracking is so harmful, so if the conversation arises when they are older I would just say we will help you if we are able to at the time, but I wouldn't make any grand promises.