Parents who buy their kids houses.

flashnazia

I have noticed that increasingly, parents are remortgaging their own houses or giving cash to their kids so that they can buy their first home. This is especially rife in the Asian community.

Just wondering what people here thought of this.
Isn't something like this one of the reasons why house prices are still rising as first time buyers are still buying with the help of their parents? If parents didn't help then there would be fewer first time buyers meaning a correction in house prices.

I personally think some kids in this situation are being spoilt. A lot of parents also do it to hide the savings stash from the benefits Agency. Meanwhile hardworking people looking to buy first home independantly get priced out.

cupid_s

I personally have very few friends in this situation (only one actually).
It is my opinion that as the kids one day will inherit the money anyway then it makes complete sense to give it them when they need it to help buy their first house.
If me and hubby are in a position to do this when we are older we will give our kids everything we have to make it easier for them.

However you can still get onto the property ladder without money from mommy and daddy. We managed it with no problems you just have to be reasonable and set your sights somehwre sensible

F_T_Buyer

It's a bit like auto fellatio, it doesn't help anyone! lol. (sorry bit of a crude joke).

All it's doing is adding fuel to the fire and moving some of the risks to the parents. It's also unsustainble long term, so what happens when this practice ends?

dmg24

My parents helped me buy my property, because they would rather see me in a nice secure home than having to rent some nasty place in a bad area.

Prices are more likely to be rising due to changes in culture and society. The huge rises of a few years ago have lead to panic buying (in all areas of the community). There are also a great deal more buy to let buyers, who are looking to benefit from the increase in demand for rental properties.

In some areas it is impossible to get on the property ladder, particularly for single people.

Where else do you expect young people to live in areas where they cannot afford to buy their own properties? The could rent (which would increase the demand for rental properties, so increasing BTL buyer), or they could go into council properties (which could be much better used for those in more genuine need).

This is especially rife in the Asian community.

I would be incredibly careful making such a spurious statement without supporting evidence.

A lot of parents also do it to hide the savings stash from the benefits Agency.

Where do you get this information from?!!! Surely if parents have the sort of money available to help their child buy a property they have not been on benefits for quite some time (if ever!), the money has to of come from somewhere!

A debate like this really needs to be back up by facts figures.

regularsaver1

I think it is a good idea - I have done tons of further advances for parents wanting to raise money for their children's deposits ect. Not just Asians as you put it - anyone

I wish my parents could help me, but they've got their own mortgage lol But I'm independent and would prefer myself to save my deposit which I have. They said they will help with fees and furniture ect - as there are 3 children.

If it helps them get on the property ladder then why not - its just like when my parents paid all my university tuition fees - to help the children better themselves

babitat

Which sounds more sensible?

Option 1) Stretch yourself and your parents, buy a house now, and be guaranteed massive mortgage payments for years?

Option 2) Wait, rent a cheap home (thanks to all the BTLs), use the money you saved to build up a bigger deposit, then buy a reasonably priced house if the market crashes.

Personally I am taking Option 2 as I refuse to be ripped off for a pile of bricks.

rsykes2000

dmg24 wrote:

Where do you get this information from?!!! Surely if parents have the sort of money available to help their child buy a property they have not been on benefits for quite some time (if ever!), the money has to of come from somewhere!

A debate like this really needs to be back up by facts figures.

I'm not the OP, nor do I know them, but cases like this have been reported in my local area for the last few years. One that was very recently in the Dewsbury reporter, Aug 4 2006 edition, concerns a Mohammed Yaseen, who stole from the state (benefit fraud) then tried to cover his tracks by giving 85,000 to his daughter to buy a property. He was ordered to pay £236,262 back to the state and sentenced to 18 months in prison.

dmg24

Stretch yourself and your parents

You are making an assumption here that certainly isn't always the case. If it is, then I agree, don't buy.

Wait, rent a cheap home (thanks to all the BTLs)

Not all areas have cheap rented properties (unless you want to live in a slum). In my area the rented properties work out much more than a mortgage - £400 mortgage compared to £600 rent - cheap?!!

if the market crashes.

That's a big if. The likelihood of an actual crash is minimal ... you could be renting for a long long time!

rsykes2000

dmg24 wrote:

You are making an assumption here that certainly isn't always the case. If it is, then I agree, don't buy.

Not all areas have cheap rented properties (unless you want to live in a slum). In my area the rented properties work out much more than a mortgage - £400 mortgage compared to £600 rent - cheap?!!

That's a big if. The likelihood of an actual crash is minimal ... you could be renting for a long long time!

Completely agree with all that. I will soon be moving to Leeds, and a decent rental property (for a single person) is the same if more than a mortgage on a decent property. I may be lucky enough to have my parents invest some money in any property I buy, which will not stretch them but will certainly help me *enormously*.

dmg24

I'm not the OP, nor do I know them, but cases like this have been reported in my local area for the last few years. One that was very recently in the Dewsbury reporter, Aug 4 2006 edition, concerns a Mohammed Yaseen, who stole from the state (benefit fraud) then tried to cover his tracks by giving 85,000 to his daughter to buy a property. He was ordered to pay £236,262 back to the state and sentenced to 18 months in prison.

You are talking about an absolute minority! This person probably also had several nice holidays, cars etc - are we accusing everyone with a nice car of benefit fraud also?!!

There are some dishonest people that would do something like this, that would do many bad things, but this certainly does not amount to

a lot of parents

as described by the OP.

As I said on my first post, comments like those made by the OP (particularly the one made in relation to the Asian community) really should not be made without being quantified.

regularsaver1

babitat wrote:

Which sounds more sensible?

Option 1) Stretch yourself and your parents, buy a house now, and be guaranteed massive mortgage payments for years?

Option 2) Wait, rent a cheap home (thanks to all the BTLs), use the money you saved to build up a bigger deposit, then buy a reasonably priced house if the market crashes.

Personally I am taking Option 2 as I refuse to be ripped off for a pile of bricks.

I see renting as dead money - but I am waiting (having to live with the parents:o & round the bf's ) while I am saving my deposit ect

Here renting is so much more expensive than a mortgage payment - you wouldn't get a 1 bedroom flat here for less that £120'000