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Helping your children on the property ladder

To what extent should we help our children get on the property ladder. Mortgages are a mine field, buy to let options, rent to buy, shared ownership. Now I have seen an advert if the parents pay a deposit it is refundable after three years with interest providing all payments have been met in that period. Seems a good idea but what are the pro's and con's I wonder? Speak to a financial expert and it becomes even more confusing. Decent rental properties are few and far between and rents are high. So what to do? Use capital and invest in property and trust that your offspring will not miss any payments - possible even with a lease and a direct debit?  Or buy a bigger property and all live together, no that's a step to far for happy family relationships. Privacy is paramount if only I had some secrets to keep!


Created By on 19/02/2017

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[deleted]
20th Feb 2017 17:56:06 (Last activity: 23rd Feb 2017 07:55:42)
1
Thanks for voting!
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Response from ecarg Original Poster made on 20th Feb 2017 22:10:47
Thanks for your take on this,it has made me think, and you do have a point.but money spent on rent without having an asset seems a waste ,Yes having someone else to maintain the property is a bonus .It's a case of you pay your money and you take your choices.I benefited by buying my council house and fortunately it was renovated after the Lockerbie disaster but off course that was nearly 30yrs ago ,It is still in a good state of repair and hasn;t caused me any major expense apart from a new kitchen but the old one was still OK but dated.
My Father was a farm manager in a tied house until he retired ,fortunately he was left enough money to purchase a cottage the third share of which enabled me to afford to divorce,every cloud has a silver lining!
My son will get a 50% share of my house but by that time he may have a mortgage whether I help him or not,.In the meantime his landlord cashes in big time.
Response from ecarg Original Poster made on 21st Feb 2017 00:56:25
You consider you may be saddling your step daughter with a burden but I consider I would be passing on an asset to sell allowing cash to be freed up for whatever purpose they saw fit to use it for.
I presume your house is fairly old and that the upkeep has been considerable.Fortunately that is not my experience my house was build about 40 yrs ago and as I said thoughly checked out after the disaster as though not near Sherwood Cres . a large chunk of the plane landed a couple of hundred yards away.
At this point the kitchen was extended ,a new bathroom installed electrics checked and I was given a grant to help with the redecoration having had to remove all wallpaper to check for cracks.
Mrs.Thatcher may have introduced the poll tax to Scotland first but I would not be a home owner without the right to buy my council home which will benefit the family eventually.
Balance in all things is a good way to live and circumstances alter opinions but they are all valid so thank you for yours and as I said they did make me think, but the trouble is I'm still undecided ,do I move and let my son rent mine which means becoming a landlord, do I give him a deposit and get him on the property ladder ,or do nothing and let him sort his self out as best suits him.
I'm pretty sure he wouldn't refuse the deposit or the chance to rent my house.The choice is mine the decision is mine but information as to the pro's and con's is beneficial.
I hope you and your step daughter also come to a decision that suits you all.
Response from anf1408 made on 22nd Feb 2017 13:48:38
I think the area of the country your children live in can be a significant factor. We helped out our daughter and her partner last year as they live in Bristol, where both house prices and rents are skyrocketting. Their rent was about to be raised by £200 per month an amount they simply could not afford. Rather than helping them with this shortfall we instead provided them with the minimum deposit required to buy a 1 bedroom flat and their current mortgage payments are about £300 a month less than their new rent. So in their case it appeared the right thing to do.

However, if you live in an area where rents are much lower, buying may not be the better option as the cost of any potential property repairs/improvements represent a much higher proportion of the property value so it may be preferable to have a landlord take on the responsibility for these.
Response from ecarg Original Poster made on 22nd Feb 2017 18:05:23
Thank you anf1408.
You raise a similar point to Lionel re. repairs etc. which is definitely a major consideration and as house prices are still reasonable in this area .In setting the rent overheads are surely taken into consideration and insurance to cover major problems.
I have since learnt that the law changed last Dec and it is no longer good enough to have smoke and heat detectors checked new ones must be installed. Should I let them my house it rankles ,it has been safe enough for me for the last 20+ years with minimal upkeep and provided it is looked after should be fine well into the future.
Response from ecarg Original Poster made on 23rd Feb 2017 07:55:42
I have taken into account and discussed with my daughter what would happen when I die, if her brother should he still be living in. my house.My solicitor would ensure she got 50% of the value of the house and her brother would get a loan to pay her off.However they would still both own the house which is still a complication.They may both choose to sell he house when I die and use the cash to move to other properties.Alternatively if I buy my son a house to rent and I become a landlord,well then there's 2 houses to sell and time for them to start afresh.Fortunately my family are all supporting of each other ,hence my recent inheiratance.
In the meantime I have got a few months to ponder and house hunt for both options.

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