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

donnythedebtmonster

In reply to the original post.

I am a new parent and have also invested in the BTL market over the last few years. As any parent will tell you they will always do the best they can for there children so can anyone really tell me why i should not investin a property or give my son the deposit for his first home ?
In 18 or so years when hopefully the boy will be thinking of leaving home, house prices will be way out of his reach to be able to fund initial costs himself so i think its my divine right to be able to help him out if i can.
I feel sorry for 1st time buyers i really do, i was there myself not so long ago and i never got any help from anyone. I'm in the Forces on a pretty average wage but i worked hard and saved hard to get my first place, granted it wasn't in the best area but it got me on the ladder and i know i would have appreciated any help my parents could give me, but being the eldest of 5 sons this just wasn't an option.
I have since moved on to supplement my wages in the BTL market and developing property so that hopefully when my son comes of age then i can help him out in any way i can.
The bottom line is that like many people have said before, parents helping out there children is not a new thing and will never change as all parents will want the best for there kids.
For the 1st time buyers out there, keep plugging away, save as hard as you can and maybe consider a cheaper area for the 1st couple of years till you can afford your desired location and you will get there.

If you want it that bad then you should never give till you achieve your aim

ianian99

If buyers stopped paying stupid money for houses then sellers would not be asking stupid money

seabiscuit_2

interesting article in todays telegraph

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/07/18/nhouse18.xml

and ill cut and paste this paragraph from the article (about 5th from bottom)

"He added that the popularity of buy-to-let was distorting the market. "The buying power of investors makes it harder for ordinary people to get a foot on the ladder," he said. "First-time buyers accounted for under 30 per cent of all home purchases last year compared with 50 per cent in 1995.""

BobProperty

In one of my previous incarnations one of the things we often did was run large figures through peoples' fancy ideas to see if they stacked up in the real world. So, with that in mind, the avearge house price will be £286,500 will it? Let's say we can find a 15% deposit so we only need to borrow £243,525. IO at say 6% gives roughly £1220 a month. Well, not a problem to our happy FTB who can get a mortgage of 6 times income, so they only need to earn £40,600. But wait, to enable Mr & Mrs average wage earner to afford the average house, we'll just have to adjust the allowable income multiplier to 9.2, so our happy FTB only need to earn £26500. Simple.
Just one problem, take home from £26500 is about £1640 a month so, so long as you can eat and pay your council tax on £420 a month, you're laughing as you are on the property ladder.
Actually there's two problems. You still owe £243525 at the end of the 20 years. If you opted for a repayment mortgage you would have to pay £1740 a month. Anyone remember the "4 Yorkshiremen" sketch, "we used to have to pay the mill owner for the privilege of working......"

hornetgirl

vishpatel wrote:

Yes, but many aren't even aware of this fact - and many don't pay it.

Besides, property is for the 'long term'. Not to sell.

Bit of a sweeping statement. Everyone I know who owns BTL property is fully aware that there will be a capital gains tax liability.

And who says property is for the long term. I bought a house in 2002 for £73,000 and it has just been valued at £125,000. That wasn't a very long term for it to provide a decent return.

sanfrancisco

Hey Hornetgirl,

Vishpatel was being sarcastic.

Do you think you will get the same returns over the next 4 years?

vishpatel

hornetgirl wrote:

Bit of a sweeping statement. Everyone I know who owns BTL property is fully aware that there will be a capital gains tax liability.

And who says property is for the long term. I bought a house in 2002 for £73,000 and it has just been valued at £125,000. That wasn't a very long term for it to provide a decent return.

I chose my words carefuly & stick by them.

Everyone says property is for the long term... don't try and kid anyone there. Can probably dig up 100's of quotes to that effect on here! **

Have you actually sold the property? If not, it hasn't provided any return at all, as yet.

** EDIT: didn't take long - found one here!
http://forums.moneysavingexpert.com/showpost.html?p=2510446&postcount=2

vishpatel

donnythedebtmonster wrote:

In reply to the original post.
In 18 or so years when hopefully the boy will be thinking of leaving home, house prices will be way out of his reach to be able to fund initial costs himself so i think its my divine right to be able to help him out if i can.

18 years is a long time when your talking about house prices.

Good luck all the same. If it we're my child, I would invest as much as I could in a child trust fund. That way, I wouldn't have to pay a penny in tax. Would start off with some aggresive investment choices/targets, but move into safer ones as the child approaches 16-18.

Putting all your eggs in the property basket for 18 years is one hell of a risk if you ask me!

vishpatel

ianian99 wrote:

If buyers stopped paying stupid money for houses then sellers would not be asking stupid money

If banks stopped lending stupid money, sellers wouldn't be able to get what they ask for.

Greenspan has a lot to answer for.

jonnydoe

Almost lost the will to live reading this thread..