Buying 2nd home for child’s future

beezkneez

Hi

I’m not super rich but just wondering what the options are for buying a second house that would be for my child in 15 years time

What are the options available now mortgage wise? Buy to let ? Interest only- assuming house prices increase and and interest rates stay low, put a tenant in and hope they look after it- is that allowed on interest only?

Or could either me or my partner get one of our names taken off our mortgage and then get a single mortgage?

Has anyone looked into this?

Thanks

benbay001

Seems pointless, assuming the idea is for the child to live there when they turn 20 or something.

Are they even going to be living in that area?

Will they go to uni for 5 years?

Will they have a family?

Just stick the money in an index fund and im sure they will thank you more.

Davy_Jones_II

It’s not a great plan. Do you intend to have it sitting empty from now until they want it, just paying council tax, heating, electricity and maintenance for year after year, or let it out, with all of the effort that involves, and if so will your son want a place that’s had tenants in for years?

Why not invest in an ISA for them instead?

I was at university hundreds of miles from home at age 20, and never went back to live. It’s not an uncommon situation.

ec9wrr

Totally agree with other posters. A house is going to be their home, it’s not just an investment. It depends on location and how big a home they want. You’d definitely be better off investing in a stocks and shares isa. Vanguard do some great low cost index funds.

AnotherJoe

Does this child have special needs or something like that?
Otherwise as everyone else has posted it's expensive and pointless, a combination you don't want.

csgohan4

Child will also be losing more potentially such as FTB incentives, as above save it up:

Someone who found out, ignorant of the consequences:

https://forums.moneysavingexpert.com/discussion/6044112/added-son-to-house-title

amnblog

Bit baffled by all this negativity here.

If you want to buy an investment property for your child you will need perhaps 25% deposit and, in most cases personal income above £25,000.

Provided the rental income from the property is sufficient affordability is not an issue on the lending. You can have interest only but that may not be smart depending on the plan.

Consult an Accountant before a mortgage broker to make sure you don’t fall foul of taxation rules.

ACG

I do not think it is a great idea:
1) What will the tax implications be now and in 10-20 years time? CGT, income tax, stamp duty etc.
2) The rental income is potentially going to be taxed.
3) What happens when you have a problem tenant? Who pays for that? To evict them and to put right any damage?

A BTL property is a business, it could quite literally ruin you trying to evict someone if you do not follow the laws and processes in place. I have been a landlord and I would never do it again, certainly not for my kids benefit and I love my little girl more than anything. As others have suggested, bang the money in a savings account, have an easier life and spend the time with your kid rather than dealing with nightmare tenants which will undoubtedly crop up over a 10-15 year period.

DCFC79

Responses weren't negative.


I agree with previous posters, stick the money into investment isa or similar.


When the time comes they can decide what to do with the money, they may want to buy a house but they should be given that choice.

dimbo61

Some good Child ISA,s and savings accounts to build up funds for
1 A car and driving lessons
2 Living in a new city while at Uni
3 Buying that first home with help from Bank of Mum and Dad via ISA,s or other savings

[Deleted User]

amnblog wrote: »

Bit baffled by all this negativity here.

Really? BTL is probably the least tax efficient way to save for the child's future plus it's not a passive income.