helping daughter buy a house

rtho782

If you're going to attach this many strings to the gift I wouldn't bother with it. I've supported my fiancee through uni for 3 years, we've just bought a house together (which is about 75% my saving for deposit).

If her parents had offered to do this while she was still at unit then tried to stipulate what she got back if we split, I'd be !!!!ed off and pointing out that in that case I want reimbursement on the money I spent supporting her if we were being that petty.

In this situation it's even worse as the poor guy is also supporting your daughters kid and will be doing so indefinitely.

booksurr

I think it is entirely right and proper that the parents should express an interest in preserving their money for the benefit of their bloodline, not for the benefit of a stranger who could "soon" split from her

obviously as stated above, a gift is a gift, (and it will need to be one for the reasons explained) but making sure the daughter's share of the property protects the money they have given her is the right thing to do

kingstreet

There are lenders which will accept the money being loaned and a second charge taken over the property with the loan being repaid from the eventual sale proceeds.

An independent broker will help with the correct lender options.

Marvel1

It's scenerios like this then I wouldn't bother and let them fund it themselves.

There was a similar one not so long ago, this was from the other side - a bloke and partners parents were funding the deposit and they wanted to ensure she got it back if there was a split. I advised it's best to decline the offer.

DoctorDooLittle

My understanding would be, if you they sell the house the proceeds get split 50/50. The girl keeps her 50pc and the man keeps his 50pc, minus what he owes his mortgage lender.

It's not a bad deal for the man, because he's living in a house with half the mortgage he'd have to pay if he was there on his own.

I don't see how it makes any difference to the man whether the girl has paid off her 50pc of the mortgage / house price or not. It's still a 50/50 split.

DoctorDooLittle

P.S. House prices can go up or down.

taking_stock

you could always buy half the house yourselves, as the parents. in which case, you retain 50% in event of any split and then your daughter and her partner would get to share the remainder if anything happened.
there could be inheritance tax issues, however.
Also - and very importantly - the second home rules means you may be liable for the increased stamp duty on purchase, which could be a hefty price to pay for the 'insurance' of protecting your daughter's wealth.

kinger101

taking_stock wrote: »

you could always buy half the house yourselves, as the parents. in which case, you retain 50% in event of any split and then your daughter and her partner would get to share the remainder if anything happened.
there could be inheritance tax issues, however.
Also - and very importantly - the second home rules means you may be liable for the increased stamp duty on purchase, which could be a hefty price to pay for the 'insurance' of protecting your daughter's wealth.

It's also a bad idea for capital gains tax. No private residence relief on the parents share if they've retained beneficial ownership.

I think in reality the arrangement is pretty straightforward if they can come to an agreement and explain to a solicitor who should own what in the event of a separation. The difficulty is finding that agreement that doesn't put anyone's nose out of joint.

taking_stock

the difficulty will be in how such a contract is drawn. if their daughter and her partner are the only named owners and later marry. in the event of any divorce, the court would split the assets as it saw fit. worth noting that a pre-nup is not binding in English law.
tenants in common may be the best bet, but at what percentage?

Cacran

I have read all your posts and taken on board what you have all said.
This is purely a gift to my daughter as we gave a similar amount to my son. The difference there was that my son wasn't having a mortgage and his house is in his own name.
I have looked at it from the position of her boyfriend. Without our money, they could not afford the mortgage on the house. As we are grateful that he has taken on our granddaughter, he does not pay to bring her up. Her actual father pays money each month (which he should do as he wanted a child and promptly left my daughter when she had a very problematic pregnancy).
My daughter intends to pay half of all their bills. She has been paying all the bills for the past 6 years in her own property, which is rented. He lives with his parents.
Looking at it from his perspective, he will get a mortgage he can afford, a partner and a child, of which he loves both. We do not want the money back, we want it not to into the boyfriends hands, should they split or anything. We want our daughter and grandaughter to keep the money which we have worked hard for, over the years.
I know that this could cause a rift in their relationship but they have discussed it so are both pleased with the gift. They want to be together and want my granddaughter to spend her childhood in a nice area with a garden to play in etc. etc. The house is in the village where she goes to school and my daughter works at the attached nursery.
We just wanted to see our children to benefit from our saving, all our lives,rather than them waiting until we pop our clogs, at which time we would not be a part of their happiness (well we hope it goes that way!)
I do appreciate all points of view that you have given. Thank you all.