Getting children on property ladder

Poppy78_2

Advice sought on supporting offspring with getting on the property ladder in a way that supports responsibility for young adult and minimises risk for parents. We have very little money but want to try support in some creative way.

 

HampshireH

Encourage them to save from a young age and be responsible with their funds is the best way.

Kids who don't know the value of money or respect it won't save or appreciate its value.

You don't say how old your offspring are but I'm not sure there are many creative ways 

A windfall from inheritance gifted down from parents can help but I wouldn't suggest this over ensuring your own security.

They don't have to own a house as a young adult

Other options you could look at spring board mortgages Barclays used to do one. No idea if they still do.

theartfullodger

I brought 3 kids to be self-sufficient, and earn enough to survive without me.  

Best lesson you can give.

user1977

Why does the method have to be "creative"? Assuming they need a mortgage, there aren't really many methods. Reducing risk for you means not being a guarantor or a joint owner. If they are deemed by lenders to be able to afford the mortgage payments, that would suggest they don't need your help with those (unless something unexpected happens down the line).

Which leaves you with helping them with the deposit, and lenders will generally only accept gifts for that. Which at least means you know how much money you're waving goodbye to.

Or of course you could help them with the other costs involved in buying the property (professional fees, buying furniture, renovation etc).

davilown

theartfullodger said:

I brought 3 kids to be self-sufficient, and earn enough to survive without me.  

Best lesson you can give.

I think is a very good point. To buy our first house we had to move locations to be able to afford it. I think a lot of people assume they should be able to buy in the ‘nicest’ location first but can’t afford to.

[Deleted User]

These days most children buy with significant help from their parents, in the order of £25k.

https://inews.co.uk/news/parents-children-mortgage-lenders-buy-houses-property-330778

If you can't provide that, and there is no chance of significant inheritance, then you will need to get creative.

Some areas are cheaper, but only because there are not the good jobs there. You might get lucky and find an up-and-coming area.

Saving is obviously a good idea, but it's unlikely to be enough on its own. It's a very difficult situation, especially if you have three kids.

aoleks

not sure how old they are, but had I started saving when I got my first job, buying would have never been an issue, not even with today's ridiculous prices. even on a low salary (<£30k), you can save a 5% deposit on a half a million pounds property in several years. saving for a bit longer, getting a partner or simply earning a bit more means you can get things done even quicker.

teach them how to be financially literate and understand how money works and everything will be fine.

julicorn

aoleks said:

not sure how old they are, but had I started saving when I got my first job, buying would have never been an issue, not even with today's ridiculous prices. even on a low salary (<£30k), you can save a 5% deposit on a half a million pounds property in several years. saving for a bit longer, getting a partner or simply earning a bit more means you can get things done even quicker.

teach them how to be financially literate and understand how money works and everything will be fine.

That example seems a bit off to be honest. Fair enough, you can save a 5% deposit on a £500k property (i.e. £25k), but when you can only borrow around £135k on the £30k salary, then that will still only buy you a £160k property (assuming you've also saved for fees separately), not half a million.

greensalad

aoleks said:

not sure how old they are, but had I started saving when I got my first job, buying would have never been an issue, not even with today's ridiculous prices. even on a low salary (<£30k), you can save a 5% deposit on a half a million pounds property in several years. saving for a bit longer, getting a partner or simply earning a bit more means you can get things done even quicker.

teach them how to be financially literate and understand how money works and everything will be fine.

But how would you buy a half mil property on a £30k salary? Even with a deposit of 5% (£25,000) the max a lender would give you is £135,000 which means property of £160k - very far off half a mil.

Even with a partner on a similar salary with a similar deposit you're still looking at £320k property purchase price, and that's before you even consider stamp duty, conveyancing costs, survey, furniture, appliances, moving fees and potential work needed to property. 

Mojisola

Poppy78_2 said:

Advice sought on supporting offspring with getting on the property ladder in a way that supports responsibility for young adult and minimises risk for parents. We have very little money but want to try support in some creative way.

Get them used to the fact that they don't have to have everything brand new, top of the range, designer labelled.

Norman_Castle

theartfullodger said:

I brought 3 kids to be self-sufficient, and earn enough to survive without me.  

Brought them from where?