Helping kids to get on the property ladder

[Tahiti]

Possibly a mute point given the current market (and where a recession may lead values) but I’m curious what the most effective way of getting a child (teen rather than an adult) onto the property ladder is if a parent wanted to help them up before they are old enough to own a property in their own right?

Thinking about a scenario where you put a deposit down on a first time buyer type property, and partially cover the mortgage via rental income in the interim.

Clearly there are questions around control of the asset etc but would it need to be held in Trust? Or is it simply a better idea to hold the property as the adult and transfer it at a later date?

[Countdown]

Unless you can finance the property purchase without taking a mortgage I think the simplest way would be to go down the BTL route.

Although yields are low they should cover the running costs and you/they should benefit from capital growth.

[Panamax]

How much £££ are you talking about here? Unless it's big bucks you'll almost certainly be better off using tax free JISA/ISA until junior knows where they want to live and actually wants to buy a property. amongst other things he/she can only get the "first time buyer" Stamp Duty benefit once.

You could also consider starting a private pension at a cost of £2,880 p.a.

[Tahiti]

anonymous said:

[redacted]

No. It’s as I say.

[Tahiti]

Panamax said:

How much £££ are you talking about here? Unless it's big bucks you'll almost certainly be better off using tax free JISA/ISA until junior knows where they want to live and actually wants to buy a property. amongst other things he/she can only get the "first time buyer" Stamp Duty benefit once.

I think you might be right in practice.

It was something that came up in conversation over the weekend - reflecting on house price inflation and how to get kids on the ladder without delay.

[Sir Bagalot]

So 3% SDLT loading when you buy.

When you transfer you have more SDLT to pay and CGT.

[Tahiti]

Sir Bagalot said:

So 3% SDLT loading when you buy.

When you transfer you have more SDLT to pay and CGT.

Thanks, and yes - I'm coming to the conclusion that putting money aside, and creating a deposit for the property of their choosing is probably the more sensible option. I will no doubt be proven wrong - and prices will continue to rise.

[N8CYL]

Er... Moot point. Sorry

[Zstar]

Tahiti said:

Sir Bagalot said:

So 3% SDLT loading when you buy.

When you transfer you have more SDLT to pay and CGT.

Thanks, and yes - I'm coming to the conclusion that putting money aside, and creating a deposit for the property of their choosing is probably the more sensible option. I will no doubt be proven wrong - and prices will continue to rise.

m
Without turning this into a house price thread, I don't see short term growth continuing give the cost of financing a property. Getting 2.x% in a fixed rate cash ISA may be a safer way to help your son.

Entry and Exit costs of property would put me off if he is not dead-set on living there (which as a teen he won't have a clue)

[crusty]

Hi, I am looking at a fairly similar situation.

2 girls, will be 19 and 21

Would like to put a £50k deposit down on a £200k property, that they could either live in or rent out.

Ideally mortgage in their name/s

At some future point, they would buy out the other one or sell and split any profits.

This is hopefully planned for next year, when ideally they would both have proper jobs, but would be happy to act as a guarantor if required.

Thoughts?

[LeoSayer]

crusty said:

Hi, I am looking at a fairly similar situation.

2 girls, will be 19 and 21

Would like to put a £50k deposit down on a £200k property, that they could either live in or rent out.

Ideally mortgage in their name/s

At some future point, they would buy out the other one or sell and split any profits.

This is hopefully planned for next year, when ideally they would both have proper jobs, but would be happy to act as a guarantor if required.

Thoughts?

Is this what your daughters actually want?

Why not just give them £25k each?

Sorry if the question is a bit blunt but I am considering similar for my son so playing devil's advocate.

[crusty]

LeoSayer said:

crusty said:

Hi, I am looking at a fairly similar situation.

2 girls, will be 19 and 21

Would like to put a £50k deposit down on a £200k property, that they could either live in or rent out.

Ideally mortgage in their name/s

At some future point, they would buy out the other one or sell and split any profits.

This is hopefully planned for next year, when ideally they would both have proper jobs, but would be happy to act as a guarantor if required.

Thoughts?

Is this what your daughters actually want?

Why not just give them £25k each?

Sorry if the question is a bit blunt but I am considering similar for my son so playing devil's advocate.

I want to get them on the property ladder, If they are living in it, they are saving rent, if they are renting somewhere else there should be a bit of monthly income coming their way to help.

At the point they want to buy something else, they have a good start