Helping grandchildren purchase their own home.

Sea_Shell

One other point to consider....you say you've discussed this with your Children (plural), and you have 2 Grandchildren. Are the 2 GC from just one of your children, or do they have one each? Are these 2 GC the only ones you have (or a likely to have)?

Just trying to see the dynamics here...

trailingspouse

Just a few questions, as I agree with others that this might not be the right move for you right now.


1) when you were in your 20s (or whenever), did anyone help you buy your first home? Do you remember the sense of pride, of being 'grown up', or doing it all by yourself?? Do you want to deny this to your grandchildren?
2) none of us know what the future will hold - this is your money, that you have saved for all your life. Your life savings. Imagine a scenario where you have indeed given the bulk of it away - and then, for reasons that none of us can foresee right now, you are in desperate need of money. Would a part of you be expecting your grandchildren to help you out? How would you feel if they couldn't - or simply didn't? Would you feel that they 'owed' you in some way? Would that be fair, when you'd effectively put yourself in that position?

3) do you know when you're going to die? No, neither do I. It could be tomorrow (sorry to be brutal), it could be in more than 30 years' time (more and more of us are likely to live to be 100+). If you die in the near future, they'll get the inheritance anyway. If you live a long time, you'll need that money yourself.


So, in my opinion - they can wait until you've finished with it.

AnotherJoe

You are trying to run before your gc can walk, as neither of them seem ready for house ownership yet. If you contribute to a HTB isa that would help them without you gutting your savings.
A variant would be to pledge to match whatever they can save toward a deposit and then as a surprise when they are buying add a bit more , say £10k or so each.
And don't get so carried away and desperate that you come up with ideas such as buying them one house between them because there are so many potential issues there.
You could also change your will so you leave most to the gc.

Not_Me

Seashell. I have 2 children and they each have one child.

Not living together no. Just sharing the costs to purchase a property which will then go onwards to help them both have their own.

I know money and families is always a risk. But they either work together or they both lose. That is the way I see it.

The money just sits there, even with my holidays the savings just increases.

As my Grandson has already left home and renting it seems a waste. But I doubt he could get much of a mortgage currently.

Granddaughter has some savings and could get enough for half a house.

There is the problem how could it be made to work?

Thank you all.

BoGoF

Not_Me wrote: »

Seashell. I have 2 children and they each have one child.

Not living together no. Just sharing the costs to purchase a property which will then go onwards to help them both have their own.

I know money and families is always a risk. But they either work together or they both lose. That is the way I see it.

The money just sits there, even with my holidays the savings just increases.

As my Grandson has already left home and renting it seems a waste. But I doubt he could get much of a mortgage currently.

Granddaughter has some savings and could get enough for half a house.

Thank you all.

Owning half a house is no good if you want to sell and move out though. If they are nearly 25 do they have partners they msy be moving in with soon.

I seriously would not buy a house for them to share, it will only end in tears and resentment. By all means give them money to put into a HTB Isa and when the time comes to buy you can perhaps help more.

But as mentioned above....do they want your financial assistance?

silvercar

The problem with giving the money away is that you don't know how they will spend it. Putting a deposit on a property for one grandchild is difficult. It is harder to get a joint mortgage if one of them isn't living in it, very awkward when the second one wants to buy their own place and the first can't afford to buy out the second (to give "their share" back to them). Also effects first time buyer status if someone owns a share of a property that isn't really theirs.

Could you give to your children to hold on to for their child to buy eventually?

theartfullodger

Not_Me wrote: »

Helping grandchildren purchase their own home.

Best help for both kids & grandkids is, IMO, explaining to them & bringing them up so they are self-sufficient & can cope on their own.



Others may have alternative views.

steampowered

A gift of cash sounds like a very nice idea. And it is tax free (assuming you survive 7 years).

Perhaps you could contribute into a "help to buy" ISA for them. This earmarks the cash for a future home, when they are ready. And it gets a government bonus on top.

Buy a house with Granddaughter and he pays rent which buys himself a share and they clear the small mortgage quickly?
..
I will be wanting to keep at least £50,000 myself, which leaves less than £100,000 for them which is not enough to purchase a property.

I strongly recommend that you do not buy a property for them.

This comes with all sorts of downsides:
- They would lose the benefits associated with being a first time buyer (e.g. help to buy ISAs)
- They would lose first time buyer stamp duty relief, and would have to pay the higher rate of stamp duty for a second property
- They would have to pay income tax on the rent if the property is let

Mojisola

Not_Me wrote: »

My pension leaves me very comfortable. I do not spend half of it and as mentioned take 4 holidays a year.

If you gift from excess income, even IHT doesn't come unto play.

steampowered

trailingspouse wrote: »

1) when you were in your 20s (or whenever), did anyone help you buy your first home? Do you remember the sense of pride, of being 'grown up', or doing it all by yourself?? Do you want to deny this to your grandchildren?

My perspective on this is that buying a first home is much harder than it was when the Op was young. That is just a statistical fact - the size of the average deposit has multiplied about 3x over the past two decades, after adjusting for wage inflation.

The average age of a first time buyer is now 30. Statistically the average person isn't able to buy a property in their twenties.

Though I accept it is much easier to buy in some parts of the country (e.g. the Midlands) than in others (e.g. London / South-East).

So, if the Op was to give her grandchildren a gift towards their deposit - she could see that as simply "evening the odds", giving the grandkids the same opportunity the Op had when he/she was young.