Helping children onto property ladder, advice needed.

Mumma26

I am mid 50s and mortgage free. My children are mid 20s. I have seen a 2 bed flat in London £580k. I have £350k in savings.

Do I

a/ Buy this in my own name, as a buy to let. Being a second property, so I would only have £300k to put down and roughly £50k on stamp duty?

or

b/ buy it with my son who is renting in London and currently paying £1.3k p month rent. So I would put down £300k and he would take out a mortgage for £280k (or £250k if I gift him the money I save on the stamp duty?) and then the stamp duty would be just £18k? Mortgages are less than what he is paying in rent.

or

c/ do I buy it and put it in both my children's names and I pay the mortgage?

My reason for wanting to have my name on the deeds is incase one of the children get divorced. I also have a family income of around £45k which I don't use, so am aiming to pay off the mortgage as soon as possible.

What is the best way to do this? My other child also mid 20s is living overseas, so one option is to help them in a few years time, as I have another family property which I want to sell and could help that child out. My fear is divorce and my son losing the lump sum I have gifted to him.

PS I scrimp and save and drive an unfashionable old car!

Brie

Do your children want to own a property? Can you afford to live comfortably if you never get any of the money back? Can you afford the whole mortgage yourself if your son doesn't keep up his payments?

Keep_pedalling

I would do what we did with our children, make a substantial gift to each of them so that they have a sufficient amount as a deposit to buy their own place. It sounds like you may have a potential IHT liability, so better to gift now. You can also reduce your surplus income building up more IHT liabilities by establishing regular gifting from it.

Worrying about a possible divorce really is not worth complicating your life for.

itsthelittlethings

I would try and keep it as uncomplicated as you can. A lot of the options seem to be you choosing what to do, whereas your children might want something different.

Do you want to be a landlord?

Also is your pension provision sorted?

user1977

Do your children's (hypothetical?) spouses like the idea of mum-in-law co-owning their matrimonial home?

Tabieth

My parents helped me and my brother out, they gave us a gift of money that we used towards respective deposits. That way they got to help us and we maintained our independence and made our own choices. I wouldn’t have wanted (and my parents certainly wouldn’t want) joint mortgages or them to be our landlords.

I’d recommend this approach. Make a no-strings-attached financial gift to your children and leave them to it.

Albermarle

Have you separately made provision for your older years. At your age you could easily live another 35/40 years.

You need to look after your own needs as well as your adult children.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82189490#Comment_82189490

I think with an untouched income of £45k a year that should not be an issue, although if that is the case why is the OP needing to scrimp and save?

Mumma26

Thanks, interesting comments and very useful. I think I will stay out of the purchase and let my son do it on his own, gifting him the £300.

Re the scrimp and save, I am just not a spender. Thanks everyone xx

Herzlos

That seems by far the most sensible option.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82189547#Comment_82189547

Why not £150 each? You may have the intention to make a similar gift in several years time to your other child, but that may not actually come about, and should you meet an untimely death the second child will loose out big time unless you make a will giving him a bigger share of your estate.