Parents who buy their kids houses.

happenstance

All depends on situations and that, but like someone said on the first page it doesn't really help anyone. So many FTB are buying a property thinking once they get on the ladder their sorted and the house will keep rising, dream on. The market will have to stabilise.

Personally I think the whole situation has similarities to a pyramid scheme. My parents offered the whole remortgage our house to help you but I declined mainly as I don't want to buy something that I think is overpriced.

happenstance

lush_walrus wrote:

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.

I'd have to disagree on that one. Outside the UK and esp in Europe renting is indeed more popular but this is not to do with not being able to afford mortgages, simply a different attitude. Over here an Englishman's castle and all that.

Its not just about prices being unaffordable to some people, but being unaffordable to the average FTB on an average wage, which is unsustainable. Of course this depends on the area, but the south east is looking this way.

abbecer

If i'm in a position to help my sons with their first houses i definitely will. Me and my husband are working really hard to have a secure financial future for our boys. We certainly do not throw money at them, we give them time instead. They will be brought up to respect money and that it has to be earned by cleaning the car moving the lawn etc. Myself and DH both had jobs as teenagers to earn our own money. Our parents weren't in a position to help us and i would like my boys to have a brilliant start on the housing ladder. I would rather benefit them while i am alive to see it, rather than them getting everything when i am dead.

Rebecca x

Gorgeous_George

I agree Rebecca but the housing bubble will burst at some point. By helping kids buy over-priiced houses, we are delaying the inevitable crash/realignmnent - but it will come and those who encourage/help their kids get on the ladder will see their financial help disappear.



GG

missk_ensington

The reason I thin why the OP has mentioned Asian families, is not a racist slur or anything like that, it is a fact that it is against the Muslim religion to pay interest, so this could quite possibly be the reason why Asian families are helping their children buy property.

Another reason why Asian families may be more inclined to give a lot to their children is because of the culture difference- the UK, America etc are INDIVIDUALIST societies and many Asian communities are, by their very nature, COLLECTIVIST societies. Collectivism (the opposite of Individualism) focuses on the priorities of the group and not the individual.

In a collectivist society, people identify themselves with the goals of the group much more so than the goals of individuals. Collectivism also focuses on things such as fitting into the group, behaving in ways that are line with social norms, group solidarity, and gaining a sense of identity from being part of the group. America is a more individualistic country (we do value individualism) whereas many Asian countries place a greater value on collectivism.

Hence why Asian families would be more inclined to buy their children a house, or give them a peg up in getting there.

hethmar

We gave our son the 10% deposit for his first apartment. He was living in one room in a house share in a dreadful area and it was costing him the same amount as his mortgage payment would be - once we paid the 10% deposit of the purchase price for him.

Im not at all guilty that we did this. He had worked his butt off at school and uni and we didnt like seeing him in such a crappy set up after all that work. On top of that he was becoming so miserable he was actually thinking about leaving a very promising career/job because he hated the area he had to live in.

He would have got the money when we kick the bucket and why not give it now and see the happiness it gives to your kids.

We didnt get a penny from our parents (because they simply didnt have it to give, nor did we inherit anything) and the first 10 years of our married life was a miserable, hand to mouth struggle. If we are in a position for our kids to avoid that, then we will definitely help out.

PS, we are not Asian, btw, I think any parent would do this for their kids if they had the means.

lowis

i think ALL parents want to help their children, regardless of their country of origin or skin colour and if they are able too, then they will.

lush_walrus

happenstance wrote:

I'd have to disagree on that one. Outside the UK and esp in Europe renting is indeed more popular but this is not to do with not being able to afford mortgages, simply a different attitude. Over here an Englishman's castle and all that.

Its not just about prices being unaffordable to some people, but being unaffordable to the average FTB on an average wage, which is unsustainable. Of course this depends on the area, but the south east is looking this way.

It was a bit of a general comment really, but it is definately true of some European countries. The ones that I have experience of are Switzerland, which is expensive to rent but as a rule flats can only be rented so the only opportunities to buy are houses, which are out of the reach for most people and therefore the majority rent. Finland and Denmark are the same, as a rule only the wealthy buy the rest it is out of reach.

I rarely involve myself with the south of Europe so I can't speak for there, but in my experiences of Northern Europe prices are out of reach for people and yet a property crash has not corrected it, the market just adjusts to more renters.

It was also true of the UK, up until the 50s it wasnt the norm to buy a property at all and again for most it was totally unaffordable. This is a modern trend and modern problem, just because the proeprty market collapsed in the 80s people assume it will be the only way the market will go. In reality no one knows.

hethmar

Im amazed by the number of posters on this site who seem to be sitting waiting for the "crash" when all the BTL will sell up and they can jump in and buy a much cheaper property.

I dont understand this at all. Our son got his first apartment over 3 years ago when there were talks of a crash. His was actually a BTL property where the guy obviously believed a crash was coming. He bought it for £70k. He is thinking of moving and just had it revalued at £100k. £30k in 3 years - admittedly he has worked hard on it and has improved it no end with new kitchen and bathroom - all done by himself with dads assistance.

So what happened to the crash 3 years ago? Or the one that was due 5 years ago?

Meanwhile son has lived happily in a lovely sunny flat with secure parking and a has taken a lodger. He is spending the same per month that he would be paying for a rubbish room in a house share and all that rent for 3 years would have been wasted money.

Im sorry, I cant understand how people sit on the side lines for 5 years waiting for the crash to come and not having the privileged and pleasure of their own home.

MortgageMamma

Thanks to MissK_ensington for her obviously educated insight into the differences in asian communities to that of western culture.

Personally, I would love to be part of a big family that supported me and had shared aims and interests. This is what keeps families together, although I imagine in some cases asian children can feel controlled and stifled. You are correct MK that (dependent on their level of beliefs) they are not allowed to pay interest. There are special mortgages available to cater for this, some known as sharia mortgages. I will not go into too much detail about them as it will detract from the original purpose of the thread.

To me, the OP seems to have posted these comments without due thought or consideration, and the impression I get is of somebody very angry who is unable to get on the property ladder due to current market conditions, and perhaps their own personal circumstances. My advice to the oP would be to seek some guidance and see what can be done to assist you in achieving your goals. I would also advise that you relax and have some tolerance of the way other people choose to get on the property ladder. If someone was offering you a wad of money to set yourself up for life I am sure you would have difficulty saying no. The micro economics of relatives offering their family money for property purchase is unlikely to be the sole contributing factor as to why house prices are high in general.

Shared ownership, buy to lets, property developers, right to buys, the increasing size of the population, the ever increasing culture towards owning property are all contributing factors in their own rights, as is the number of people that choose not to cohabit or marry, needing their own place, families breaking up (heavier divorce statistics) again creating the need for two houses, all these things drive house prices upwards, and a sudden house price crash is not imminent.

As property ownership is a natural aspiration for most, some people jump on the ladder with 100% mortgages, some save, some buy with friends and brothers and sisters, some take guarantor mortgages, some take cash from parents and relatives, some take 2nd jobs.......none of these methods are wrong or immoral, buyers don't want to wait ten years for a house price crash before they buy a house and will do whatever it takes to jump the hurdles and get the ownership they so desire.

Its my job to help them get there - I enjoy it, it's rewarding. I fully support parent deposits/purchases to help their kids out. Your kids are what drive you as an individual and my kids are why I work so bloody hard - so I can do this for them when they leave home.

And whilst we are all sitting here feeling sorry for ourselves because house prices are a little bit high, spare a thought for those in the third world , those at the mercy of natural disasters and war ridden countries, who don't even have roofs over their heads let alone the opportunities afforded to us living in the UK.

Rant over.

MM