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Had my hair cut yesterday, and the 19 y.o. girl who washes it before the cut told me she and her similarly aged boyfriend had just bought their 'first house'.

I've been going to this salon some time, and I know she only earns about 10k plus tips. She's told me her B.f. only makes about 18 - 20 k a year (some kind of model).

The house? 3 beds in Dulwich, s. london. Asking price? 295k.

WTF?!

Anyway, turns out their PARENTS have 'bought it for them'. They will pay 600 a month on the mortgage, and so will the kiddies. And guess what they bought it for?

go on. Guess

You'll like this...

really!

£230,000

Now that looks to me like almost a fifth off!!!!

Cant decide whether they are insane or geniuses...

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Had my hair cut yesterday, and the 19 y.o. girl who washes it before the cut told me she and her similarly aged boyfriend had just bought their 'first house'.

I've been going to this salon some time, and I know she only earns about 10k plus tips. She's told me her B.f. only makes about 18 - 20 k a year (some kind of model).

The house? 3 beds in Dulwich, s. london. Asking price? 295k.

WTF?!

Anyway, turns out their PARENTS have 'bought it for them'. They will pay 600 a month on the mortgage, and so will the kiddies. And guess what they bought it for?

go on. Guess

You'll like this...

really!

£230,000

Now that looks to me like almost a fifth off!!!!

Cant decide whether they are insane or geniuses...

This prompts me to canvas some advice from some of you clever guys. When the time is right (when I've judged that prices have fallen by enough) I would like to help my kids by gifting them some of the amount towards a house purchase (don't worry, I'm not going to borrow it!). My concern is, how do I protect this from any current or future partners/spouses, should they split up? i.e. I wouldn't want half my gift going to the partner in the event of a split.

Edited by Casual Observer
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So what Legal Eagle advised that bunch?

Parents committed for years unless younger ones' earnings go up loads. Maybe parents are loaded though?

Any relationship splits occur and it could be a nightmare.

I hope wills and life insurances are properly sorted all round too if, forbid, they are needed.

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Guest The dude
Had my hair cut yesterday, and the 19 y.o. girl who washes it before the cut told me she and her similarly aged boyfriend had just bought their 'first house'.

I've been going to this salon some time, and I know she only earns about 10k plus tips. She's told me her B.f. only makes about 18 - 20 k a year (some kind of model).

The house? 3 beds in Dulwich, s. london. Asking price? 295k.

WTF?!

Anyway, turns out their PARENTS have 'bought it for them'. They will pay 600 a month on the mortgage, and so will the kiddies. And guess what they bought it for?

go on. Guess

You'll like this...

really!

£230,000

Now that looks to me like almost a fifth off!!!!

Cant decide whether they are insane or geniuses...

"£230,000".....

This is still way too overpriced....completely madness. All for the sake of bricks and mortar. This house isn't going to be a home.....it's more like a prison. This couple will eventually split up. They should not be buying at their sweet and tender age.....

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Casual Observer. If you are going to do this I suggest that you make sure that your son/daughter gets separate legal advice and that you also take advice before the purchase. It's perfectly possible to have the couple as the legal owners of the property but to have a deed of trust that sets out that the house is owned in differing shares by different people. E.g. you could say that your daughter owned 60% and her partner owned 40%. Alternatively you could say that you owned 20%, your daughter 40% and her partner 40% (i.e. you can 'own' a share even if you are not registered as a legal owner).

Whether it's best to have an increased share for your kid or for you to hold a share depends on the circumstances. It particularly depends on whether or not they are married. If you are unmarried and split up then your assets/liabilities are simply allocated to whoever owned them before the split up (so both the first and second scenario work). If you are married the court can distribute all the assets owned by the couple (jointly or independently) as they wish. In this case you would want to make it clear that YOU owned part of the house so that it wasn't counted as the assets of the couple.

Quick answer - yes it is possible but make sure that you take legal advice and have it all set out as clearly as possible in a legally binding form - there have been many expensive and long lasting legal battles on 'understandings' about property ownership.

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Casual Observer. If you are going to do this I suggest that you make sure that your son/daughter gets separate legal advice and that you also take advice before the purchase. It's perfectly possible to have the couple as the legal owners of the property but to have a deed of trust that sets out that the house is owned in differing shares by different people. E.g. you could say that your daughter owned 60% and her partner owned 40%. Alternatively you could say that you owned 20%, your daughter 40% and her partner 40% (i.e. you can 'own' a share even if you are not registered as a legal owner).

Whether it's best to have an increased share for your kid or for you to hold a share depends on the circumstances. It particularly depends on whether or not they are married. If you are unmarried and split up then your assets/liabilities are simply allocated to whoever owned them before the split up (so both the first and second scenario work). If you are married the court can distribute all the assets owned by the couple (jointly or independently) as they wish. In this case you would want to make it clear that YOU owned part of the house so that it wasn't counted as the assets of the couple.

Quick answer - yes it is possible but make sure that you take legal advice and have it all set out as clearly as possible in a legally binding form - there have been many expensive and long lasting legal battles on 'understandings' about property ownership.

RET - Thanks for taking the time and trouble to give such a helpful reply - very much appreciated :)

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This prompts me to canvas some advice from some of you clever guys. When the time is right (when I've judged that prices have fallen by enough) I would like to help my kids by gifting them some of the amount towards a house purchase (don't worry, I'm not going to borrow it!). My concern is, how do I protect this from any current or future partners/spouses, should they split up? i.e. I wouldn't want half my gift going to the partner in the event of a split.

Give the money in the form of an interest free loan and have it all legally drawn up. Or, have your name on the title deed as a part owner of the property.

This should be especially easy if the future partners/spouses are not already in the picture.

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Give the money in the form of an interest free loan and have it all legally drawn up. Or, have your name on the title deed as a part owner of the property.

This should be especially easy if the future partners/spouses are not already in the picture.

Thanks Sine - I gues there could be CGT implications if my name were on the deeds?

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RET - Thanks for taking the time and trouble to give such a helpful reply - very much appreciated :)

There is a problem from any lenders point of view in doing the above.

The lender will want 100% charge over all the equity in case of repossesion such that they can be sure they have full control & can recover legal costs etc.

Lenders wont allow gifted deposits unless the people gifting sign away all rights to anysuch gift.

It is very unlikely any lender will 'knowingly' allow separate legal agreements to pertain to THIER security.

I think people do set up separate legal agreements but dont let the lender know. They dont inform the conveyancing Solicitor as of course they are duty bound to act for purchaser and lender equally.

There is a way I think, but tread carefully especially if your kids intend having children. What about 'common law rights' where a non married partner gets allocated assets by the court in the event of a split? Does this rule still apply?

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There is a problem from any lenders point of view in doing the above.

The lender will want 100% charge over all the equity in case of repossesion such that they can be sure they have full control & can recover legal costs etc.

Lenders wont allow gifted deposits unless the people gifting sign away all rights to anysuch gift.

It is very unlikely any lender will 'knowingly' allow separate legal agreements to pertain to THIER security.

I think people do set up separate legal agreements but dont let the lender know. They dont inform the conveyancing Solicitor as of course they are duty bound to act for purchaser and lender equally.

There is a way I think, but tread carefully especially if your kids intend having children. What about 'common law rights' where a non married partner gets allocated assets by the court in the event of a split? Does this rule still apply?

Thanks again - in a perfect world I'd be confident of ever-lasting relationships, and happily give to my kids' partners equally. Sad indictment, I guess, of what things are like these days.

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I'm not sure about lender's practices although I do know that friends of mine have just completed a similar sale and the solicitor drawing up the deed of trust was also acting for the purchase and the lender - I imagine that it is a decision for the lender as to whether to take the risk. The father put in c20% and was named as owning that on the deed of trust.

On "common law rights". Common law marriages were abolished in England in 1753. It's a common fallacy that you can be a "common law spouse" and gain rights based on that status. If you are not married then you are thrown back on the general law which means that the court can simply decide who owns what when the split takes place. The court don't have the power to decide that it's unfair and rearrange who owns what. There is a caveat to this. It's often difficult to tell who does own what especially if the couple have been together a long time. If the details aren't explicit then the court will try to decide who owns what. This mainly depends on the "intention" and "contributions" of the parties. The court can be quite inventive in deciding what they think the parties intentions are and what counts as a contribution - essentially this gives an underhand way of redistributing assets to reach a fair result. This is why it is crucial tht you make it absolutely clear what your intentions are in writing and in a legally binding form. If you do that they can't change it ....(yet....the Gov are looking into whether they should be able to do so).

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Cant decide whether they are insane or geniuses...

Nope, they're insame. They've bought a house costing over 8.2x their joint income. Or if they have kids in the future, and drop down to one income, then 12.7x single income.

The total mortgage repayment is more than this income! And are there parents going to continue to contribute £600 per month for the next 25 years* of the mortgage.

Actually, no, make this "infinity" years, as £1200 a months would be the Interest Only payment on £230,000. I hope their parents are planning on living and working forever.

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Deed of trust is an excellent idea...you could also insist on a formal loan agreement for the money lent and secure it with a charge on the property.

Mind you if the market takes it into negative equity it's worthless.

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Deed of trust is an excellent idea...you could also insist on a formal loan agreement for the money lent and secure it with a charge on the property.

Mind you if the market takes it into negative equity it's worthless.

I wouldn't be looking for repayment, it would be a non-repayable gift in reality, but made to look like a loan in order to avoid half of it going to a partner, in the event of a future split. I'm hoping to judge when the market is at or near its low before we did any of this.

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Thats madness lol.

I think someone is going to get stung quite badly on this one unless they havea grand master plan we dont know about (like offing the boyfriend for morgage insurance to cover the house morgage - would be a tactful way to gain a position on the housing market and also remedy overcrowding!!)

Other than that - their screwed! But I dont think they are the only ones...

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This prompts me to canvas some advice from some of you clever guys. When the time is right (when I've judged that prices have fallen by enough) I would like to help my kids by gifting them some of the amount towards a house purchase (don't worry, I'm not going to borrow it!). My concern is, how do I protect this from any current or future partners/spouses, should they split up? i.e. I wouldn't want half my gift going to the partner in the event of a split.

Sorry for being cynical, but this could well turn out to be an incentive for splitting up if the partners financial situation is much weaker.

If it was my money, I would

- give the use of the house, but not the title. So they can save and pay their own way eventually. CGT only if the house is sold, which is up to you as you are the owner.

and/or

- put it in a trust for the grandkids.

But thats just me. I know some other people are incredibly generous, with money as well as generosity of spirit.

I don't think there will be a CGT implication for an interest free loan. You name would be on the title as a lender (basically saying the property is secured as collateral), and you would only get back at maximum your original loan (less repayments if any).

Good luck, whatever you decide.

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1200 per month for a 230k mortgage would be a repayment mortgage.

I actually think this isn't half as daft as it sounds.

Now I don't know South Dulwich that well but £230k for a 3 bed is an excellent price.

And if their parents are generous enough to pay 50% of the repayments then it makes sense allround.The kids will be renting off the parents instead of someone else.

On the surface it sounds like a forced seller and it sounds like they have been royally shafted with the price.

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Now I don't know South Dulwich that well but £230k for a 3 bed is an excellent price.

Since when? 2004?

Or is this area full of people on 70k eager to mortgage on a three-bedroom house? Because that's what a potential purchaser would need to earn for that to be a historically normal price level.

it sounds like they have been royally shafted with the price

Yes, I think the mortgagers have been royally shafted at that price too. The seller probably bought for 100k in 2001 and is laughing at them.

Edited by MarkG
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Guest The dude
Give the money in the form of an interest free loan and have it all legally drawn up. Or, have your name on the title deed as a part owner of the property.

This should be especially easy if the future partners/spouses are not already in the picture.

Or why not simply just wait for houses to become affordable again? Then you could forget about all the hoops you'd have to jump through.

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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