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

[The Clamp]

But you have the equity accrued.

Absolutely. Don't get me wrong, everyone should strive to own property. I'm simply saying that getting a mortgage is not the end of the road. You don't own it at that point, you just have a huge debt.

 

[Weststander]

Not having a go at your son HWT, but at his age you must have had a half decent job and been able to get the mortgage. Your suon sounds like he has 'other priorities' in life and working/getting set up on his own.

My wifes brother is still at home, never moved out and he's 45. Works part time and plays the guitar, piano and generally does - well I dont know but its pretty much SFA. My FIL (now passed away) would go nuts over him in frustration to get him to 'do something with his life'. Didnt work. I put up a new fence for the MIL last week and last summer remodelled their back garden into a low maintenance one as the MIL is mid 70's now and not too sprightly on her pegs, my BIL did sod all to help. Sometimes you have just got to accept that people are different and some just dont have the drive and push of others.

What’s interesting is that you can’t necessary tell if a ‘lazy’ teenager will be like that as adult. My (belligerent at times) Dad treated three of us with a controlling aggression, simply because of a scruffy bedroom and in my case because I didn’t usually have a part time job as a kid. Which only served to cause a reaction against that, arguments.

No credit to him, two of those three kids, as adults ended up being pretty successful and driven, hard working, also hard working around the house and garden.

The other sibling didn’t.

No predictable outcome in our family.

 

[Braggfan]

We haven’t got to make this party political. There were colossal rises in SE England property prices 1997 to 2010, a huge influx of overseas investors, and the golden age of buy to let landlords. Overall, part of a huge resi property boom 1995 to very recently.

But that wasn't "labour" in power during that spell, it was pseudo tories

 

[The Clamp]

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.

Baby boomers were lucky. That's indisputable. They had opportunities no other generation had before or will ever have again. And fair play, the smart ones made the most of it. Who wouldn't!

 

[Glawstergull]

"Having a roof over your head is absolutely a right"

There's a whole lot of difference between having a roof over your head and owning that roof surely?

I also agree with your statement.

Nothing is ever black and white and I understand that giving a big lump of money to someone who today shows no interest in changing there own situation would seem dangerous.

The system that now puts the OP in a position to help his offspring(profiting from house price increases) is possibly down to someone helping him earlier in the cycle.

I don't have all of the answers by the way.

 

[Guinness Boy]

I'd also add that if you are young and single then you have no ties and you don't need anything bigger than a one bed. If you're that desperate to own go and find a place with slightly cheaper property, start with a studio and work your way up. If the bank of mum and dad is paying for single milllenials to own houses in places like Brighton and London then it's being abused.

 

[Dick Swiveller]

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

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

Listening to a podcast the other day, they mention Heart touring and the fact the lead singer is now 69. Now THAT makes me feel old.

 

[Diablo]

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% ?

Long term loan means that money has to be paid back. you could have two agreements One saying loan(for if problems occur) and one saying gift( So no tax or repayment needed if all goes well).
Another thing if you are wanting some sort of repayment. Make it repayment rather than interest. As interest would be an income(therefore taxable whilst repayment isn`t.

 

[Harry Wilson's tackle]

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

Cheers mate, will do

 

[Triggaaar]

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.

Give it to me, I'll engage!

 

[Beach Hut]

Long term loan means that money has to be paid back. you could have two agreements One saying loan(for if problems occur) and one saying gift( So no tax or repayment needed if all goes well).
Another thing if you are wanting some sort of repayment. Make it repayment rather than interest. As interest would be an income(therefore taxable whilst repayment isn`t.

Do you need to declare it ?

I just want them to realise they are not getting £xx for nothing at first, would probably tell them no need to re-pay at a milestone in their life, certain Birthday or getting married etc

 

[Harry Wilson's tackle]

Give it to me, I'll engage!

Don't bang your head on the door on the way out

 

[surlyseagull]

Yes getting on the property ladder in the 80s was a lot easier but the financial market was a mess ,just one example PPI now,people also forget that interest rates in the 80s were at one point 18.5% ,imagine paying that now.

 

[Triggaaar]

Don't bang your head on the door on the way out

You gave it to Bakero didn't you. I didn't see this post until just now I'd have seen it last night, but I was playing computer games.

 

[wellquickwoody]

Not having a go at your son HWT, but at his age you must have had a half decent job and been able to get the mortgage. Your suon sounds like he has 'other priorities' in life and working/getting set up on his own.

My wifes brother is still at home, never moved out and he's 45. Works part time and plays the guitar, piano and generally does - well I dont know but its pretty much SFA. My FIL (now passed away) would go nuts over him in frustration to get him to 'do something with his life'. Didnt work. I put up a new fence for the MIL last week and last summer remodelled their back garden into a low maintenance one as the MIL is mid 70's now and not too sprightly on her pegs, my BIL did sod all to help. Sometimes you have just got to accept that people are different and some just dont have the drive and push of others.

True.

It is true, yes. But people like that should not have a right, as Mustafa seems to believe, to have their parents stand a mortgage or deposit for them.

 

[Beach Hut]

Yes getting on the property ladder in the 80s was a lot easier but the financial market was a mess ,just one example PPI now,people also forget that interest rates in the 80s were at one point 18.5% ,imagine paying that now.

That is a very good point as interest rates over the last 10 plus years have been very low hence the criteria has been made harder to get a mortgage as less profit in them.

Anyone remember when Norman Lamont sang in the bath as interest rates hit 15%

The issue now is if they went back to these levels there would be widespread mortgage defaults

 

[Diablo]

Do you need to declare it ?

I assume. Interest yes. repayment no.

 

[Thunder Bolt]

Yes getting on the property ladder in the 80s was a lot easier but the financial market was a mess ,just one example PPI now,people also forget that interest rates in the 80s were at one point 18.5% ,imagine paying that now.

Very true, but apparently we were 'lucky'.
I got married in 1969, but we only had one holiday in 11 years, because we were saving to get out of the council house into our own.

 

[Rugrat]

Very true, but apparently we were 'lucky'.
I got married in 1969, but we only had one holiday in 11 years, because we were saving to get out of the council house into our own.

TBF you were lucky to get a council house. No chance at all for the 'kids' (my girls are 23 and 25) of today who pay a vast proportion of their monthly net income to rent very small, and frankly shit private flats

Back in those days when I bought my first house (a 3 bed semi) I had to pay a deposit equal to about 5 months of my net pay. Today if I assume what that salary would be (fairly easy as the type of work still exists) it would be roughly 20 months of net pay .... so yes, in my view we had it a whole load easier, plus we have benefited from meteoric equity growth

I get your point about one holiday in 11 years but I'd argue if you had that relative income today it would take you a whole lot longer to get there even if you were one of the very few fortunate enough to get a council house .. without that you might never have done it

 

[wellquickwoody]

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.

I assume you own your own home outright at age 48? And have enough put aside to give your kids £100k and leave a bit left in your pocket for a rainy day? If so all well and good. But many would say that is a very comfortable background for your kids to have come from. An awful lot of others will not pay off their mortgage till mid to late fifties and won’t have a nest egg to give to their kids all the time they are alive, the mortgage free house will be the inheritance, hopefully. No criticism intended of your situation, but others have spoken of a ‘duty’ to help kids onto the housing ladder, which is codswallop.