Parents, you're just making it worse! Please STOP!

vishpatel

Hi all,

I'm a wannabe FTB who has decided to shelve plans to buy a home for the time being. I could probably afford to buy a small shoebox in a crack den, or something an hour or two away from work, but thats not for me.

Anyway - what I'd like to say is parents who decide to help their young'uns onto the property ladder - you're only fuelling the fire.

Most young people *should* be able to afford their own living costs. There are exceptions, but for most people who have started full time employment - they should be able to stand on your own two feet.

What we have now is very high property prices which means lots of young people live at home for longer, and many get financial help from their parents to buy their first home. This is only serving to keep property prices out of reach from the average joe - i.e. those who don't have well off parents, or those who want to pay their own way.

I understand that life goes on, and many people just can't be bothered to wait for prices to fall when the easy option of parents helping out is available - but this is a very important issue for young people. Unfortunately young peoples issues are of LOW priority to politicians because they don't make up a large part of the voting public. And often young people don't fully understand their situation in the larger scheme of things.

Ultimately it is better for society that they learn to support themselves. If this happens, property prices will fall. High property prices are no good for anyone except speculating investors. They make it difficult to move up to a larger property, and it locks up an enourmous amount of the countries wealth which could be put to better use investing in the countries businesses etc...

Anyway - rant over. Would appreciate some responses from parents who are in this situation. Lets get some debate going!

seabiscuit_2

Now you see, I would put a lot of the blame on property developers and BTL who buy the houses that FTB would normally buy, they are then pushing the price up as fast

After all there arent that many parents who can afford to buy houses for their offspring

Bossyboots

I agree with seabiscuit, it is the glut of BTL's causing the problem not parents helping out their youngsters. These buyers can usually push the edges of the top price for a property, forcing out a FTB who is trying to get on the property ladder with or without parental help.

Jorgan_2

Look at it from a parents point of view, they give their son or daughter £40k as a deposit to go & by their first property. They hopefully don't have any inheritance tax issues with this gift, kids get their first place, parents get their home & space back.

BTL is really the problem with many people thinking that they can make some money without any hassle or set up a pension fund. For some it works, for others it doesn't.

Sapphire

BTL is really the problem with many people thinking that they can make some money without any hassle or set up a pension fund. For some it works, for others it doesn't.
_____

It's probable that BTL will stop working for the people who are in engaging in it - far too many BTL newbuilds are becoming available, and in the end the BTLetters, especially those who have been buying recently at high prices, will find that they will lose out big time.

vishpatel

It's not just BTL - but if thats how you want to see it.... I've yet to speak to one set of parents who are anti-BTL. What does that tell you?

There is ALWAYS going to be BTL investment in property. Yes it has grown substantially , but it will subside because the fundamentals have changed.

What is creating a further uneven playing field is parents cash.

I also think many parents are too pushy in getting their kids to buy. RENTING is a viable option, especially right now.

ukmonkey

Yes, I agree that the problem is with BTL's. People should be limited to only being allowed to own two properties (yes, I know couples will probably then have 4 properties between them, and that it'd be hard to enforce!).

Jorgan_2

OP, do you have any figures that show how many parents are helping their children to buy property. As an EA I speak to numerous parents who are horrified by the prices their children have to pay to get on the ladder.

I still feel there are more BTLs out there than parents helping children, certainly in my area. I know many people who have bought 8-16 BTLs in the last 4 years.

vishpatel

Its not a question of whats worse.... clearly there are more rental properties than parents who help their children financially.

I just said parents are actually making it worse, by allowing the bubble to continue.

dunstonh

BTLs are the problem but dont worry. Many will get caught out and lose their homes in the future which will bring prices down again and make it easier for first time buyers.

The greed and risk that some have taken without realising will come back and bite them hard. Its just a case of when and how long over and to what degree.

BobProperty

ukmonkey wrote:

Yes, I agree that the problem is with BTL's. People should be limited to only being allowed to own two properties (yes, I know couples will probably then have 4 properties between them, and that it'd be hard to enforce!).

To the above, only in cloud-cuckoo land will you be able to restrict the number of properties owned by an individual. Do let us know how you intend to word the legislation?

Now the serious point, surely a lot of parents are using BTL to get their little darlings on the property ladder. I have come across a number of situations where mummy and daddy have bought a BTL to "rent" to their offspring and their friends while they are at university / in first job, thereby getting their foot on the first rung of the property ladder. It also makes it easier if you can re-mortgage your overpriced home counties 4 bed semi to fund it.