Helping daughter to buy house whilst she uses her LISA

Rheumatoid

Thinking of helping my daughter buy her first house either by gifting her a large sum (£50k+) or buying part of the house with her (probably 20%). I would rather do this than her have to buy using shared ownership.

I appreciate if I just gift I would need to waive any interest in the property.

The property she is looking at is around £275k

Do either of these have implications for her using her LISA (around £50k)

Thanks

Exodi

It depends if you expect any money back.

AFAIK there may be difficulty in securing a 'sole borrower, joint proprietor' arrangement and may require parties on the deeds to be parties to the mortgage, a gifted deposit would be much easier to do.

Of course in the latter, there is a higher risk your daughter could get divorced in the future and lose half the amount you gave her, but that's life.

No issue with the LISA, she can use it in any case.

Rheumatoid

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Albermarle

Rheumatoid said:

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Yes the gifting option is much simpler, but you will still have to disclose info about where the money is coming from, to both the estate agent and the solicitor/conveyancer ( and identity checks) .
We see from posts on here that some solicitors are a bit over zealous on this point, but I have just been through this process and it was easy enough with the solicitors involved .

Exodi

Rheumatoid said:

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Sorry I wasn't clear, I understand that she isn't married - what I mean is the risk she meets someone (if she's single), gets married, then gets divorced and splits the equity in the future, but as I said, that's life and I still think gifting is the cleanest option.

Albermarle said:

Rheumatoid said:

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Yes the gifting option is much simpler, but you will still have to disclose info about where the money is coming from, to both the estate agent and the solicitor/conveyancer ( and identity checks) .
We see from posts on here that some solicitors are a bit over zealous on this point, but I have just been through this process and it was easy enough with the solicitors involved .

A very good point - I remember my ex's father being extremely reluctant to provide a copy of his bank statement. I don't know what the exact reasoning was, but I can understand the emotions behind it (e.g. invasion of privacy, etc). In the end, we linked him and the solicitor up so he could talk about it and send it across privately.

Rheumatoid

Exodi said:

Rheumatoid said:

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Sorry I wasn't clear, I understand that she isn't married - what I mean is the risk she meets someone (if she's single), gets married, then gets divorced and splits the equity in the future, but as I said, that's life and I still think gifting is the cleanest option.

I would hope if she met someone they would be reasonable enough to buy in or at least enter into some pre-marital agreement if they couldn't. I would talk to her about that but yes, it is a risk and love is blind

dreaming

My daughter is currently buying her first house (hopefully exchange and completion in the next week or so) and she is using her LISA and a gifted deposit from me. I have had to complete the form to say that I will have no interest in the property etc. and did have to provide details of where the gift came from. As it was from my savings account they wanted to see bank statements for 6 months to show me sending the deposits to the savings account - which took some time as I have several current accounts and just squirreled money from all of them, and all accounts are paperless. However it has all been done now and I'm just waiting to be given the nod to send the cash to the solicitors. I don't have any experience of your other scenario but this has been fairly straightforward. It's worked out really well too as although the mortgage payment was initially a hundred pounds or so dearer than daughter's rent she has just been given a slightly reduced mortgage rate and her landlord has put her rent up starting in August so the difference is much smaller.

Exodi

Rheumatoid said:

Exodi said:

Rheumatoid said:

Thanks. She is not married and is buying on her own (unless I get involved).

I tend to agree that gifting is the cleanest option.

Sorry I wasn't clear, I understand that she isn't married - what I mean is the risk she meets someone (if she's single), gets married, then gets divorced and splits the equity in the future, but as I said, that's life and I still think gifting is the cleanest option.

I would hope if she met someone they would be reasonable enough to buy in or at least enter into some pre-marital agreement if they couldn't. I would talk to her about that but yes, it is a risk and love is blind

It wouldn't matter if she had a pre-marital agreement (a Deed of Trust in a Tenants in Common arrangement), it would effectively be superseded by marriage. There are some potential exceptions (if the Deed of Trust was drawn up specifically 'in contemplation of marriage' and a court was persuaded by it or if it was a 'short' marriage).

The easiest answer would be she happens to meet someone with £50k+ in the bank who can buy in so they have equal-ish contributions, of course it's probably a tad optimistic.

And lastly, we see very often that people can be blinded by love and a tad naive, and so many people rush into joint tenant arrangements, despite one person putting in all the money, because 'we don't plan on breaking up'.

But I didn't mean to make a big point about it, it was just a minor consideration of gifting a deposit (as there is a lot of emotion involved should the worse happen in a decade and the ex takes half the money with them).

Albermarle

The easiest answer would be she happens to meet someone with £50k+ in the bank who can buy in so they have equal-ish contributions, of course it's probably a tad optimistic.

 Even better if it was £500K