[Finance] Best way to help kids get on property market

[hart's shirt]

Best way to help kids get on property market

The ladies from the rock band Heart can probably help you.

They're always asking 'How do I get you a loan?'

 

[Stumpy Tim]

Barclays do a mortgage called Sure Start. You put the 10% deposit in an account and they provide a 100% mortgage to your kid(s). If the mortgage is repaid for three years continually, you get your cash back plus interest and your kids have a mortgage. Job done. Did it with both my kids two years ago and in twelve months I get all my money back to spend on sweets.

That's an an excellent idea frankly.

One suggestion is you pay for the deposit on a flat, but own a % of the property. So if you put down a 10% deposit, you own 10%. That way your child isn't getting anything for free, but you are getting them on the ladder.

 

[Dick Knights Mumm]

Some of the older lags on NSC met her 20 years ago. Some of the old lags on NSC met my son many times, too, and know what a lovely lad he is.

Nick is a great lad. Many happy memories. Say Hi from us.

 

[The Antikythera Mechanism]

Helped both my sons with their first properties and again when they made the move from 2 to 3 bedrooms. Best they get the benefit now rather than when I peg it.

 

[Raleigh Chopper]

Just buy them a house, easy.
Or die early.

 

[Green Cross Code Man]

Vote for a Labour Government

Except labour want to massively increase inheritance tax which will stop many people being able to help their offspring/grandchildren. Unless you mean that labour will mess the economy up even more than Gordon Brown and houses will become almost worthless?

 

[Raleigh Chopper]

Except labour want to massively increase inheritance tax which will stop many people being able to help their offspring/grandchildren. Unless you mean that labour will mess the economy up even more than Gordon Brown and houses will become almost worthless?

As opposed to the recent governments fantastic record of building very affordable, first time buyers homes.

 

[dejavuatbtn]

Wow. Just wow.

Obviously a baby boomber, not realising how lucky you've had it and now shit young people have it today.

If I had grown up kids today I would feel it was my duty to help them out financially, given that the boomers were lucky enough to be born at the right time to have incredible accumulative wealth (and not entirely earned, relatively speaking, let's be honest). Many of them are practically millionaires, only as they were lucky enough to enter the property market at the right time.

Feel sorry for your kids to be honest. Enjoy your luxurious retirement, while your kids struggle to make ends meet for their entire lives and have barely no retirement pot when they're your age, in all likelikhood.

Don’t get me wrong - I have handed over thousands and thousands so that I don’t have a luxurious retirement. My comments are as a result of experience. My kids are not struggling and earn more money than I did after my working life.

 

[Fitzcarraldo]

Buying a house is not a right - it's an earned privilege

I think it's funny when stiffs say things like this. I would argue it has become an earned privilege. Previously access to housing if on a low income through council houses, also buying a house through price vs % of average income, was easier, however with RIGHT to buy coupled with local authorities not being allowed to replace housing stock this has meant that it has become an earned privilege. Seems unfair.

 

[Green Cross Code Man]

As opposed to the recent governments fantastic record of building very affordable, first time buyers homes.

I assume that is sarcastic and if so fair enough. But I am in favour of helping both those sets of people!

 

[neilbard]

Best way to help kids get on property market

Buy them a nice flat in St. Johns Wood.

 

[Driver8]

Interesting subject as preferred option is to give each of my two a "long-term loan" to get them on the housing market which will be written off at some point.

Are there tax implications to this and if they split up from their partners could the partner be entitled to 50% ?

As long as you don’t charge interest there is no tax implications of making a loan. If you gift the money outright and they divorce they may be entitled to a share but with a loan it would be a debt not an asset for them so would reduce the ex’s share not increase it.

If you charge interest on a loan it is taxable income for you.

 

[Guinness Boy]

I think it's funny when stiffs say things like this. I would argue it has become an earned privilege. Previously access to housing if on a low income through council houses, also buying a house through price vs % of average income, was easier, however with RIGHT to buy coupled with local authorities not being allowed to replace housing stock this has meant that it has become an earned privilege. Seems unfair.

Stiffs

A typically entitled millenial view.

Having a roof over your head is absolutely a right and I would actually prefer it if houses were seen simply as a home rather than an investment, but we are where we are. I'm in my 40s and when I was growing up there were people who owned their house (or at least had a mortgage), people who lived in council houses and people who rented privately. I house shared with friends for most of my 20s and only got my first mortgage when I was married and my wife and I could pool our savings and income.

The proportions of the above may have changed, with more private renters, and the cost increased but the basic fact is that not everyone can own a house and it shouldn't even be aspirational to do so.

In Europe, traditionally most people rented. The increase in private ownership has come about, ironically, due to Brits (and other foreigners) buying second houses.

 

[Beach Hut]

As long as you don’t charge interest there is no tax implications of making a loan. If you gift the money outright and they divorce they may be entitled to a share but with a loan it would be a debt not an asset for them so would reduce the ex’s share not increase it.

If you charge interest on a loan it is taxable income for you.

Thanks, it will end up being a gift with no interest charged

 

[Garry Nelson's teacher]

A case close to my heart....musing on spaffing some of my pension pot. But....he's not showing any great interest....computer games, mates.......decided to be a musician at age 19 (dropped out of school)...now working for peanuts for a law firm, age 33...tricky. Meanwhile I have a new family, young nipper and some intention to swim in lifes rich pool till the arthritis glues me to the football on telly chair.

Tricky when the offspring don't engage.

I found that the 'game' moves to a new level when grandkids come along. Even if one's own offspring are not great with money (blame it on their parents!) the grandkids are a new level of obligation. This is not so much impacting on me, but my sister and husband shovel huge resources into their daughter and her children after she married a wrong 'un. They even downsized and bought the bloke out. They just can't bear to see the grandchildren (already pretty damaged) go without. This then creates tension with their son (and wife) who aren't themselves exactly rolling in it, but don't get anything like the same deal,


My parents didn't have two pennies to rub together and these sorts of things were never an issue. I don't know: you just what you can, I guess.

 

[southstandandy]

I was lucky enough to help my two kids out when wanting to set up homes of their own. They both have good jobs and can afford the mortgage repayments so I gave them each £50k for a downpayment on houses costing £200k and £230k. We have an informal agreement (nothing legally binding) that when they can they can repay part or all of this in time.

Personally I'm not worried if they do as in some respects I see it as passing on a little of my assets to avoid the potential burden of inheritance tax when I'm no longer around (assuming I live another 7 years), but at 48 years old I hope I have plenty more years in the tank. Both kids at the moment don't have partners as only just left university, and I just hope that if they marry and then seperate they don't lose what I've helped them with as a start. A risk I was willing to take.

Depending on your kids age the other good thing they could consider is the help to buy ISA if they are willing to save for a few years, but if you can afford it and wish to pass on some of your wealth to your kids (as I've done) that is surely your own choice. My gran left me a small amount back in early 90's which helped me get started on the housing ladder so for me it's like passing on her legacy. But only do it if you can afford it.

 

[The Clamp]

Until you have paid your mortgage, you do not own your house.

 

[Thunder Bolt]

Stiffs

A typically entitled millenial view.

Having a roof over your head is absolutely a right and I would actually prefer it if houses were seen simply as a home rather than an investment, but we are where we are. I'm in my 40s and when I was growing up there were people who owned their house (or at least had a mortgage), people who lived in council houses and people who rented privately. I house shared with friends for most of my 20s and only got my first mortgage when I was married and my wife and I could pool our savings and income.

The proportions of the above may have changed, with more private renters, and the cost increased but the basic fact is that not everyone can own a house and it shouldn't even be aspirational to do so.

In Europe, traditionally most people rented. The increase in private ownership has come about, ironically, due to Brits (and other foreigners) buying second houses.

100% this.

I keep being told babyboomers were so lucky but we lived with our parents (even though I was serving, I still went home on leave) until we married, and had two incomes to put towards getting a house.
My parents split, both lived in council properties all their lives, and I've worked for every penny.
My kids worked hard at school and both have very good jobs. I haven't been able to give them any handouts, but they're both richer than me, now. They've made their own way in life.

 

[Raleigh Chopper]

I assume that is sarcastic and if so fair enough. But I am in favour of helping both those sets of people!

I'm not arguing with your post, first time home buyers have been let down very badly for a long time, just giving the alternative argument.
Many kids still living with their parents up to 30 is the indicator, they can't afford a deposit and rent is stupidly high, and a rip off from letting agents.
Thousands of empty homes lay abandoned, 10 years they have had to do something really positive and they have done virtually next to nothing.

 

[The Antikythera Mechanism]

Until you have paid your mortgage, you do not own your house.

But you have the equity accrued.