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

[Harry Wilson's tackle]

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.

Genius

 

[Thunder Bolt]

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

It was because my ex had just finished his time in the Navy. We applied for a council house in Yorkshire where he was born, and because forces are classed as homeless, and we had a baby, we waited just a few weeks.
We stayed there for 6 years before buying our own house.


Edit to add - any equity will go to social care.
My Mother is paying £900 a week for her care home, and Mother in law is paying £650 a week for hers.

 

[mejonaNO12 aka riskit]

We were very fortunate to have been loaned 1/3 of a 10% deposit by each set of parents 8 years ago to get on the ladder. Now finally repaid but I will be forever grateful for that as I shudder to think how I would have done it otherwise. I'm also grateful they pushed us to look at buying when they did. We had no idea about the market but, getting us on when we did meant we paid £18k deposit rather than the £27k it would now take to buy the same property.

We set up a saver account for our daughter (3.5% interest I believe) which we will top up each month. Obviously I have no idea what the housing market would be in 20 years time but I'd love to be able to give her a significant chunk towards a deposit.

 

[Rugrat]

It was because my ex had just finished his time in the Navy. We applied for a council house in Yorkshire where he was born, and because forces are classed as homeless, and we had a baby, we waited just a few weeks.
We stayed there for 6 years before buying our own house.


Edit to add - any equity will go to social care.
My Mother is paying £900 a week for her care home, and Mother in law is paying £650 a week for hers.

Then I would consider you lucky, not a hope in hell my girls would be able to save unless they came home, but Seaford is well out of reach of their jobs so they are forced to pay (almost) criminally high rent

I very much get the point about care costs as I have to pay for my M-I-L ...... but when I fast forward to consider what my children will encounter I really do shudder at the thought. So whatever we are experiencing now it's impossible to believe it's not going to get a whole lot worse

 

[Triggaaar]

Genius

Not even joking.

 

[Thunder Bolt]

It's funny but the UK seems obsessed with owning homes whereas it's not a priority in other countries. Switzerland, for example, is regarded as a rich country, but many many people rent.

https://ec.europa.eu/eurostat/statistics-explained/index.php/Housing_statistics#Tenure_status

I do think rents should be regulated.

 

[Thunder Bolt]

Then I would consider you lucky, not a hope in hell my girls would be able to save unless they came home, but Seaford is well out of reach of their jobs so they are forced to pay (almost) criminally high rent

I very much get the point about care costs as I have to pay for my M-I-L ...... but when I fast forward to consider what my children will encounter I really do shudder at the thought. So whatever we are experiencing now it's impossible to believe it's not going to get a whole lot worse

Yes, job mobility does have a big say in living costs, so I can understand your girls' dilemma.
I chose to go and live in Yorkshire when my ex came out of the Navy in 71, because housing was so much cheaper, so it isn't a modern phenomena.

 

[Triggaaar]

Edit to add - any equity will go to social care.
My Mother is paying £900 a week for her care home, and Mother in law is paying £650 a week for hers.

Not everyone goes into a care home. They're trying to make it easier for people to stay at home longer.

We set up a saver account for our daughter (3.5% interest I believe)

This is off topic, but 3.5% is good. Who are you using, and what type of account?

 

[Thunder Bolt]

Not everyone goes into a care home. They're trying to make it easier for people to stay at home longer.

I know but dementia is horrible and unmanageable.

 

[mejonaNO12 aka riskit]

This is off topic, but 3.5% is good. Who are you using, and what type of account?

It was a Nationwide 'Future Saver' if I remember correctly. Any withdrawls drops the rate for the rest of that year.

 

[Nitram]

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.

And similar arguments about housing being out of the hands of ordinary people were being made then (late 70’s early 80’s).
I also remember taking a huge gamble on our present house in the late nineties worrying about negative equity because of the dip in the market then which lasted a couple of years. Obviously turned out well but things are very unpredictable in the housing market.

With a possible recession looming and uncertainty of Brexit, and loads of people wanting to get out of the buy to let market I can see a tumble in house values. I’d definitely wait a few years before committing any money to the housing market.

 

[hans kraay fan club]

My parents told us (4 siblings) as youngsters, that if we were each minded to go to Uni, that they would find the money to help us do that, and would see that as setting us on our way in life. Each of us were suitably grateful, and understood that this was in effect a (very) early 'advance' on any inheritance!

I have told our lads the same, and our eldest graduated this summer, (with a 1st ), debt-free thanks to the backing of parents and grand-parents - a position he knows he is very fortunate to be in. His brother will get the same help when he needs it (it doesn't have to be Uni, obviously - learning a trade, or setting up a small business would be equally valid).

This choice almost certainly means we wouldn't have any money available to help with the housing dilemma as well, but you can only do so much.

 

[BBassic]

I'm 34 and have been "on the ladder" for three years or so. Not because I'd scrimped and saved. Couldn't save really when over half my income went on rent and bills and food. Nope, only reason I was able to afford a deposit was because my last remaining grandparent died and she left my brother and I some money.

I hope one day to be able to do the same for my future children which is why, now that I'm mortgaged and able to save a chunk every month, I'm putting away as much as possible to be able to help them.

 

[Creaky]

We gave our daughter half the deposit she and her husband required for a mortgage on their first house about six years ago. The building society they got the mortgage from insisted we signed a document saying that this was a gift and that we would not be expecting repayment of any kind.

I guess things have now changed if they accept loans from other sources as deposit amounts.

 

[Justice]

If you're willing to help them out with a deposit, then as long as they're not on a rock bottom minimum wage then they should be able to do it, even in Brighton.

It's the deposit that a vast majority of young people struggle with.

I did it post-recession with a large-ish deposit. It helps having a very good credit rating - make sure they work on that.

Not just young people that struggle with a deposit.

 

[Brovion]

Another reason of course why it's SO much more expensive (and thus harder to get on the property ladder) is that in 1975 the UK population was about 56 million. Next year it'll be about 66 million. An extra 10 million people wanting homes, and every time someone says "Let's build some houses/flats over there" one hundred people shout "NO!"

 

[Rugrat]

My parents told us (4 siblings) as youngsters, that if we were each minded to go to Uni, that they would find the money to help us do that, and would see that as setting us on our way in life. Each of us were suitably grateful, and understood that this was in effect a (very) early 'advance' on any inheritance!

I have told our lads the same, and our eldest graduated this summer, (with a 1st ), debt-free thanks to the backing of parents and grand-parents - a position he knows he is very fortunate to be in. His brother will get the same help when he needs it (it doesn't have to be Uni, obviously - learning a trade, or setting up a small business would be equally valid).

This choice almost certainly means we wouldn't have any money available to help with the housing dilemma as well, but you can only do so much.

I took the choice to do the house instead of University fees. Both my girls got whacked for the 'new' £9K a year + loans for accomodation etc. The youngest did 4 years for her Masters and now owes over £65K. Interest alone means that is going up by over £2K a year. She's got a good job on £30K and 'pays off' (before interest) about £50 a month. Obviously that will go up as she earns more but interest will roll the debt up quicker I suspect.

I didn't see any point at all ... many/most of these loans will never get paid at all so helping them with housing seemed a better option

Don't start me on the whole (value of) Uni fees and student loans set up .... it's a total mess imo

 

[SollysLeftFoot]

Crash the economy, the only and best way to do it.

 

[Green Cross Code Man]

Crash the economy, the only and best way to do it.

Yeah and then the kids can buy cheap houses with the jobs they've not got any longer.

 

[BNthree]

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

Know of a plenty of people on interest only mortgages on variable rates that even at the moment only just managing to pay each month. If interest rates were to return to those levels then a lot of people would be screwed. Bank of England and Govt knows this so will be doing as much as possible to keep the rates down for the foreseeable future as surely property prices is what is helping boost our economy along?