Buying an adult child a house outright: long-term impact?

[Cozylittlecottage]

Have you done this or know anyone who has bought their adult child a house outright when they left uni or were in their 20s?

What impact did it have on their career/life choices and how are they getting on in life now?

Has it impacted their decision to get married?

I'm not a journalist ☺️ We're actually in the process of making plans to do this and I'm curious how it worked out long term. Did it sap them of career ambition or did it give them more confidence to pursue what they were interested in.

Just interested in the experiences of others who have done this. Thanks 😊

We're not in the league of wealth to be able to buy houses outright but we did give them a decent deposit when they were 19 and 21. Something that's very frowned upon on MN. They were also brought up to be extremely financially literate.

There was obviously the risk of a future partner ending up with a share but we discussed that. We put no strings on the money. One bought a house at 24 and the other at 27. It's meant a smaller mortgage so they have money left to invest in sipps / ISAs etc. Both in public sector so not huge earners but live in cheap areas.

No downsides in our case and the upside is having the pleasure of helping the kids.
Neither DH nor my parents could have done this, in fact we helped our parents out when they were alive.

I can possibly offer a different perspective on this.

My wonderful in-laws gifted our house to my husband, as they also did with one for his sibling. He was always aware that the plan was for the house to eventually be his, although initially he rented it from his parents before it was later transferred into his name. This was all done before we got married. It’s probably also worth pointing out that we’re now in our mid-30s and 40s.

It’s important to mention that we’ve had to completely gut the house as part of a renovation project that has taken around three years, cost tens of thousands, and still isn’t quite finished.

For me, though, the bigger point is the relationship and circumstances behind it. My husband had been married previously, and thankfully my father-in-law delayed transferring the property because he had some concerns about his then-wife. Those concerns ultimately proved to be very well founded and could potentially have resulted in the property becoming part of the divorce settlement. It could also be that if others know the situation can change and influence their behaviour.

I can completely understand why they handled things that way, and I’d hope that, if I were ever in a similar position with my own daughter, I’d be able to do the same — make sure she was protected while still ultimately helping her in the future.

People I know that were gifted houses or huge deposits did not seem to loose any ambition, quite the opposite, the security linked to owning the house allowed them to take more risks or make career moves that resulted in pay cuts (but not less work, e.g. moving from private to charity sector). They all work full time, very often managing their own business.

Friends put a lot of money into a house for their daughter. She later married. House sold and bought new house, husband paid zero. Divorced now, husband got half.

If you treat all your children the same then I think it can work. My parents gave one of my brothers a house but not me or the other brother. The brother in receipt of the house is a complete fuck up, and has continued to be. My mother will not see her part in enabling all this at all. Me and other brother have had to listen to utter nonsense about how great it is he’s been able to reduce his work hours before he turns 50 when the only reason this was possible because he hooked up with a woman with a house, rented out the house he was given and then sold it. He’s a grabby little shit and she’s still giving him money now. Apparently me and other brother don’t need it as we don’t have problems. So in answer to your original question if the person is already a waster a waster they will remain.

My parents did almost this for me. Enough cash to buy in the north or a good deposit in the south. In some sense it did reduce career ambition because I knew I didn’t need to make as much money, I won’t be caught in the rent trap. But you could also view that as allowing me to pursue a passion, which you seem to consider a good thing. I’m not sure where the line is between the two.

i know one person who received a large inheritance and did nothing for 10 years. I think they’re the exception rather than the rule.

I’d say it’s more about personality of the child than the actual gift. For some, work is just to earn money and if they could do nothing they would. For others there’s a passion they’d like to pursue but it doesn’t pay well. And for some there are other reasons to pursue a career, like social status and developing a skill.

i was grateful to have less money worries than many of my peers. I could work in the charity sector and pursue extra education for interest, even though it was unlikely to pay off financially. I have always worked and have a semi decent career now. I look back and wish I was more ambitious in my 20s but I don’t think it was the money that did that, I think I was just a bit clueless. Doubt I’d have done better or worse with more or less gifted to me.

By the time kids are at uni, I think there ambition and work ethic is pretty set and unlikely to be hindered by anything except trauma or the long slow pressure of consistent failure.

My parents did this for me about 10 years ago. I am mid-30s. I am so incredibly grateful and acknowledge how fortunate I am.

it has not stopped me from being ambitious - I have four degrees, have worked in senior roles in my field, and now have my own business. I work about 15 hours a week so that I can spend lots of time with my small children while also using my brain in a job I love. The money I earn is invested and given to charities, while my husband’s income covers living costs, travel etc.

My parents raised us to be hardworking and grateful for the opportunities that we have. They came from nothing and have always taught us to never take anything for granted, work hard, donate money to those less fortunate. I do know of people in the same position as me who have never had careers though. So I really do think it’s how you’ve been raised and your mindset about money.

i imagine you’ve considered protecting your children’s house and other assets in a trust, I’m curious as to why that’s not been the choice.

So much of this is just down to personality (and upbringing, at a push). I am sure that there are some feckless young people who have been given a house. There are also plenty of feckless young people who have not been given a house. You know your own kids.

DH was given a flat when he was about 23. Worked very well for us- he has always been dedicated and hard working, we got onto the property ladder, we were able to make decisions about things like work and having children more freely than if we'd been renting or scrimping to save a deposit. TBH it's pretty normal among my friends (both to have been recipients of a flat or 6 figure deposit, and to be giving one- I suspect the things aren't unrelated, because a good start when you're young can translate into wealth when you are older).

Give your children enough money to do anything but not enough to do nothing. Housing definitely falls within the former for me.

Friends bought their 2 adult DC a very valuable London house each. Both DC left their stressful full time professional jobs (teacher, nurse-type roles) and now spend a few hours a week on 'passion' roles instead (artist, yoga teacher, poet type of jobs).
Neither of them would have been able to afford to live in London doing what they do now without their beautiful free homes. Is that a good thing? Most of us work because we have to and perhaps that gives us some structure or meaning in our lives. I wouldn't say no if someone offered me a house but I have to say that neither of the people I know appear any happier or less stressed than those of us less lucky

Being given a free house is a big help in starting out in life provided it doesn't come with strings attached.

I would however wait until their chosen career is on track if you are concerned about it's impact on ambition and motivation, because it's tough world for you g adults jobs wise at the moment.

But providing financial security covering cost of putting the roof over ones head is certainly an anxiety reducing cushion to be able to give.

If you are concerned about a future marriage/,divorce taking away the security, then place a charge on the property for the value of your gift. Take tax and legal advice first though.

I know a family that did this.

Its been....complicated. the adult son trashed the house, filling it with crap and changing the rooms. It was a small house, lounge and kitchen downstairs and he converted the lounge into a studio for his music career. That never took off. So there is no where for anyone to sit in the house.

Every other room is full of stuff.

He blames the house on keeping him in that city and not allowing him to have made the move to London, where his career would have taken off.

The parents worry about the disrepair and periodically shell out for a skip and some work (a new bathroom with a TV so he could at least watch the tele somewhere).

The other children who weren't bought a house cannot believe the injustice. Or the waste.

But it sounds like your kids are more sensible than this and you're doing the same for both.

But, it will caution that years later the other kids are grateful they weren't the ones with the house. It seemed to infantilise the adult son and created a weird codepenency and also tension. And a certain amount of control seemed to be part of the decision to buy him the house. Control and codependency that the other adult kids are free from.

Hi 👋 I’m a child in this position, albeit a 34 year old one - and I have since taken out a mortgage on the house to pay for improvements.

I don’t think it’s thwarted my career ambitions necessarily, although I’ve never wanted to be super high powered or anything. I work a normal, professional 9-5 job but I care about doing a good job and do it to the best of my ability. I don’t see any particular difference in my attitude to work to that of my friends.

Assuming you aren't buying then a £10m mansion then I don't see it will sap their ambitions at all.

Surely if they want to have a 'nice' lifestyle and car and a bigger house at some point and privately educate their own children then they will have to fund that themselves?

You are just helping them on their way - generously for sure but lots of people do similar in terms of funding all university, large house deposits etc.

Actually they may also take some risks career wise which could pay off because they have such a nice safety net. It is a lot easier to be entrepreneurial when you have a home and your basic bills sorted.

I have a relative that has done this for her DS. It’s not ended well.

Most of my friends (all women) were gifted a house in full. I was the only one who wasn’t, but was given a substantial deposit.

All of these women are incredibly hardworking in their careers, as lawyers, doctors, accountants, health care etc. Their husbands are equally hardworking. They all seem to be using the financial advantage given to them to ‘pay it forward’ and gift their own DC houses. One friend just purchased a 1-bed flat for the first of her DC, and plans to do the same for her other two.

They certainly haven’t wasted a cent. I do wonder if their upbringing had a lot to do with it though. All from aspirational immigrant families who worked insane hours to afford private schooling for them. They all (like me) worked from age 14, only stopping for mat leave.

How many years has thos couple lived together in rented accomodation?

Ive seen several couples jump from living with mummy and daddy but dating each other like teenagers, spending the night and going on holiday is the most they spend in each others company through their 20's, and jumping to buying a house together whether married or not...and then they realise they dont actially like each other enough to live together and everything comes crashing down within 6 months to a year.

You dont know someone until you live with then.

We may be in a position to have the optipn you are facing, have came from both pir families which were nearly all on benefits. So I dont want half my money being lost in the event of a divorce. Surely there must be a way to safeguard it so that you retain ownership.

But then I wonder whatbimpact that will have on relationship. DH and i started with £0 and we struggled a lot but we always pooled pur money and resources. I dont imagine your childs spouse feeling left in a good position if they knew they had no way of owning some of the house their living in. And then financially their disadvantaged too as missing out on house prices rises and building equity.

In fact more im thinking, i dont think its a good idea. Its complicated and can affect their dynamic as a couple. Id maybe offer to setup a standing order to my own childs account each month for them to do as they please with instead. Let them cover serious things together for that sense of "we did this" and we cover some monthly breathing space/fun money.

In general I’m not a fan of giving young people large sums of money. I remember the feeling when I bought my first flat. I was so broke. I had no furniture and I couldn’t afford holidays for years but I had done it. Standing in my empty living room with my keys in my hand, that feeling of achievement was just amazing, and made me want to achieve more.

I appreciate things are different now, and house prices for first time buyers are so much higher, but still, don’t think that making your children’s live frictionless is a totally good thing.

The people I know who have had this happen for them have just not really strived very much. They've ended up doing multiple masters in creative things but without the critical drive to make headway in the career, or being a very part time yoga teacher or barely doing anything at all.

I personally don't think it's been good for them seeing it as a peer from the outside. And what will they do for their own children? Because they won't have earned anything to help their own kids out at all.

I think help with a deposit is great but not just being handed a house.

My parents didn't do this - they could have done but chose to give me a large house deposit instead. Personally I think this was quite a solid choice, DH and I have had to work for the mortgage and I guess I think we don't take it for granted as much. I know we had a great leg up but I also feel more sense of responding.

I have two friends whose parents bought them houses outright. Mixed bag there and it depends on how you want to look at these things.

Friend 1. She has worked throughout and continued to be ambitious. The house has helped with periods of unemployment (redundancy in an industry where this happens) and burnout (her DH took a year out). Honestly probably owning the house outright meant she and her DH didn't rush back to work as fast as they might have done with redundancy/burnout but I think you can also see that as a positive - it gave them breathing space to figure stuff out.

Friend 2. Has worked only intermittently and part time in the 25 years since he left university. Tries out random things - usually performing arts - gives up. Lives off his wife's salary. It's really hard to know whether he would have got his act together and got a proper job and stuck to it if he hadn't been given a house outright at 21 because I think some of it is just his personality. I think the most likely outcome would have been that he would have lived off his wife more fully but she might have got fed up without the free house and then their children wouldn't have their parents together. Hard to know overall if it was good or bad.

My feelings for my own children when the time comes is that I don't think I will do the outright thing when they are really young like 21, I think it's risky. I think I am inclined towards a deposit instead at around late 20s so I have more opportunity to judge how they are with money

I'd give them house deposits, as it's near enough impossible to save for these without a young person, unless you never go out, or travel.

I'd make them pay a mortgage themselves. In this way, their lifestyle will match their earned income. It's very important that young people feel either a constant reward for their hard work, like a nice house and holidays or constant deprivation, so they feel the need to work harder to improve their lifestyle. They are still young, so are still developing character and resilience. You don't need to geld them by providing so much, you remove their drive and competetiveness.

Keep the rest for grandchildren house deposits, grandchild foreign travel and grandchild university fees: All things that will encourage their brain to make them work.

You need to use your money wisely to ensure that successive generations who carry your DNA get smarter, more competetive and richer. Enough to provide education and cultural capital, but not enough to turn them into dodos, who are ostensibly able to survive, but lack the flexibility to escape environmental pressure. Future-proof your DNA!

I think it can deprive them of a sense of achievement that they've bought their own home but they sound like they are achieving in other ways so probably all ok. Depends where they live too because in some cities, very few people can buy without the bank of mum and dad.

I do know of someone who did this. The son was entitled. Wasted his money because he didn't have a mortgage to pay and treated his family very poorly. Maybe he is just a prick though!