Parents who buy their kids houses.

sportbeth

I think if you are in a position to do it this would make sense. Why give 40% of your property to the government when you die (after all the other tax you give them) How is that fair? My other half is in the 40% tax bracket before he gets the cash to pay the mortgage, then to give it back to the government when we hand the house down to the kids is outrageous!

If you can, then do it, if you can't then lump it and work hard for it like everyone else.

My other half and I have just moved into a house after 18 months hard saving for a deposit. We ebayed everything, MSE'd for months and even sold my car so that we only have one and I walk everywhere to afford it. The house is worth every single penny to us because we've done it all ourselves and worked our nuts off for it

mrcow

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.

Option one of course!

Why would I want to "rent a cheap home" that I can't do anything with?

I'll buy my own house thanks and start making repayments of my own rather than pay someone else's for them thanks! Buying your first house is always a struggle (just in case anyone is looking for a free ride?)

All all this is irrelevent btw as I already own my own home and have been repaying off my mortgage with a vengeance and now have the luxury of flexibilty as to what I wish to do with my home and my finances. I would never have considered renting as to me, it's dead money.

Oh, and if I can help bank roll my three children into nice housing (or university) when they're older, then I will, as I'll be well free of any mortgage by then

lush_walrus

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.

Exactly, it is personal choice. My parents helped me hugely by buying me a property to live in while I was at Uni. At the end of the day it meant that I lived rent free and came out the other end without a single debt. I spent 5 years at Uni full time in two different blocks, sadly a lot of my friends built up too many debts to continue past their degree and therefore never managed to reach their final career goal. My parents were anything but out of pocket as the other rooms in the house were rented, which covered their costs plus more and eventually after qualifying I had an asset.

And as for the housing market dropping, well there have been people predicting that for many many years now while the prices just keep on rising. It's funny how in the UK people assume that once property becomes unaffordable for some people the prices will drop. Travel around the world a bit and suddenly it will all become clear, housing can keep rising beyond the affordability of the masses, all it means is more people rent.

manhattan

its been said so many times!

everyone is in a different situation,some need to buy asap for some reason or other,some people have to rent as they cant get a big enough mortgage as they are single,and what mortgage they are offered is not enough to buy a phone booth!

we rent a 2 bedroomed house from a charitable housing association in the best area in our city,other private rented houses in our street are being let out at over double the amount we pay,we have a large house deposit too.
so in our situation we dont need to move asap,we can just ride the market until things are sensible.

as i said everyone has a different situation though!

manhattan

and no i am not looking for a free ride!

i worked my a$$ off saving for years,saving as much as possible and going without a few luxurys.

babitat

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!

I agree that you may not be stretching your parents, but it is however a big risk with their money in an overpriced market.

It's a different story here for rent vs mortgage: £350 for rent - £650 for mortgage. So Option 2 works for me but not for everyone.

I am interested in any cost calculations for a £400 mortgage.
I have found borrowing for a £120k house using a typical 10% deposit over 25 years would be £600 per month at least.

babitat

mrcow wrote:

Option one of course!

Why would I want to "rent a cheap home" that I can't do anything with?

So that you can save more of a deposit up and then pay less on mortgage payments when you do buy. A lot of this is based on there being a crash of course but I am patient and not a risk taker at all when it comes to money so I will wait and see for now.

Buying a house would cost me an extra £300 per month and that doesn't include the extra maintenance costs. Of course I would be able to do things to it but I am not prepared to pay that much extra when a crash could be around the corner.

dmg24

I agree that you may not be stretching your parents, but it is however a big risk with their money in an overpriced market.

It is a big risk with anybodies money in any market! Are you saying that nobody should buy? Otherwise my parents would have invested their money in a BTL property - so no change in risk at all!

I am interested in any cost calculations for a £400 mortgage.
I have found borrowing for a £120k house using a typical 10% deposit over 25 years would be £600 per month at least.

When did I say I had a £120K mortgage?!!

A lot of this is based on there being a crash of course but I am patient and not a risk taker at all when it comes to money so I will wait and see for now.

How patient are you planning to be?!! Ten/ twenty years? By the time you're ready to take a risk you'll probably be too old to get a mortgage!

When/ if the market ever crashes ... what happens if they warn of another crash in a few years time?!! You going to hold off again?

You really do need to be more realistic.

cupid_s

I do think that while it's considerably cheaper to rent then that's the best option. However I also live in leeds and we worked out that for a place big enough for me and my husband we would be paying £600 to be in a decent area.

We had a substantial deposit saved so buying our house is costing less than £450 per month in mortgage. And it's nice to see our mortgage statement every month showing effectively how much we've saved by paying a mortgage instead of renting.

But as more people buy houses to let at current prices, and need to cover their mortgage, surely rent prices will have to go up or landlords will be out of pocket? And then it will be better to get a mortgage

Jay1b

People moan about the interest on a home being dead money. But 5% interest is less than house inflation has been for the last 10 years and is expected to be in the next year or so (8% i believe the figure is).