OT : A helping hand....

gtvlusso

had dinner with some friends at the weekend;

Conversation of a bunch of mid-thirties people goes something like this:

Kids - aren't they sweet, until they can move.....
Houses/House Prices
Holidays
Nostalgia
Work
latest gadget
Car/transport
Politics

Anyway - Whilst we were on the 'house' debate. I asked the question; "How many people have had a hand up from parents?". A very impertinent question to be honest, but I was more interested in the stat than the value - as people were a little tipsy, the answer actually came quite honestly and I was genuinely surprised.

Nearly all except 1 of that group of friends have had a helping hand to either get on the property ladder or manage debt - some in the region of £50k to £100k or the parents have taken a 'stake' in the house being purchased with the view to a percentage at sale time.

My own story, I have had a helping hand - as a present at my wedding my parents paid for my legal fees and surveyors fees for my house total cost £2000 ish. It is actually something I could afford at the time, but my parents insisted.

As you guys are pretty much anonymous to me, I wondered if your own groups of friends were in the same position? If this is a national phenomenon or just the my friends are rubbish with money.....Is a hand up to start living your adult life the norm now?

bails87

I'm 24 and don't know anyone around my age who owns their own place. People are either still at home or renting. I know a couple of people who are pretty well paid who've had to move back home in order to allow them to save enough money for a deposit.

One couple have gone from renting to living with the girl's mum, she's also had to buy a car on finance because without some kind of 'substantial' item on her credit history she wouldn't be able to get a mortgage.


Can't wait til it's my turn..... :roll:

rhext

No hand-up for me: unless you count the considerable investment they made in providing a happy, varied and secure childhood/studenthood. The magnitude of which investment in time, energy and hard cash continues to stagger me now I'm striving to do the same for my own kids.

It was easier when I was younger though: 105% mortgages weren't uncommon and wage inflation must have been running at 10-15% per year. You borrowed more than you could possibly afford, lived on baked beans and slept on the floorboards for a few months and after that inflation took care of things for you.

rubertoe

It depends really - alot of my friends bough their homes when people were practically giving away mortgages and most have 100% mortgages so therfore no helping hand was required.

Another friend of mine bought his home with his parents putting up the dpeosit and owning a 25% share in the property and a different freind of min was lucky enough to have his parents buy him his house outright as a gift when he got married.

Me personally - we saved Hard for 5 years, pooled our savings together (me and the missus) and put of getting married and put up a decent deposit. we were lucky that a neighbour of my GF (I'm still putting of getting Married... shhh dont tell) left her some money that enabled us to get there quicker.

BTW your gatherings with friends sounds alot like my meetings with my friends....

sketchley

bails87 wrote:

I'm 24 and don't know anyone around my age who owns their own place. People are either still at home or renting. I know a couple of people who are pretty well paid who've had to move back home in order to allow them to save enough money for a deposit.

One couple have gone from renting to living with the girl's mum, she's also had to buy a car on finance because without some kind of 'substantial' item on her credit history she wouldn't be able to get a mortgage.


Can't wait til it's my turn..... :roll:

Not sure that's good advice. APR on a car is not going to nice and even if you got 0% you you could of got a better deal if you negoiated. Best option for building a good credit file is to get a credit card and set up a DD to pay the total amount each month, better still get 2 or 3. Then put your monthly expenses (food, petrol, clothing, entertainent etc) on the cards then pay in full at end of month, the more you put on the better, providing you pay each month. Cost to you is Zero. However as you only pay the bill next month you can collect interest on the cash in your bank account, plus if you get a rewards card or cash back card you get back money everytime you use it. We get around £200 of john lewis vouchures a year simply by doing this with a John Lewis Partnership Card. Another top tip is to move money around your bank accounts, as bank look at total income vs expenditure it pushes the former up. Apart from that, never ever miss a payment or go past your agreed overdraft.

bails87

Sketchley
It might be hire purchase, or contract hire, or something like that, don't know the specific terms.

mudcow007

we have had my own house now for just over a year an we did it all by ourselves (i'm 28 an my Mrs is 26)

saving for a the 12% deposit was a ball ache but we managed it

my parents didn't help with the deposit or anything but did buy us some furniture an things aswell as my girlfriends parents did too

sketchley

bails87 wrote:

Sketchley
It might be hire purchase, or contract hire, or something like that, don't know the specific terms.

NP.

The implication was your friend had the money but chose to buy won via credit just to get credit rating. That is madness pay for car on a credit card then pay off the credit card next month. Instant good credit rating, zero cost plus cash back with the right card.

jzed

No financial assistance - in fact will probably give a helping hand the other way.

suzyb

I still live at home so I suppose I've always got a hand up. Would never be able to rent or buy for what I pay for my digs

daviesee

I have taken nothing from my parents bar the good upbringing.
They worked hard to get what they have and raise a family. I am damn sure that I can do the same and would not dream of compromising their retirement spending money.
If someone's parents are awash with money then why not I suppose but I would add a provision that those receiving are fully aware of what they are getting and are not just being spoiled and taking it for granted. The circle will continue from there.

I remember when the vast majority of families I knew did NOT own a house. Maybe we are going back to a renting society.

clarkey cat

Mum have me £3000 for my final payment of my post-grad course fees. Dad occassionally puts a dirty £20 in my top pocket, slaps me on the cheek and grunts: "This'll see you right laddy."

First.Aspect

None as yet. I'm trying to persuade my father to pass away 7 or more years after assigning his assets to his offspring, but no luck as yet. He's completely on board with any way to avoid tax, but isn't sure he'll be dead soon.

I had a group of friends down south in the 90's and of the 5 of us, 4 had substantial assistance, at least along the lines of your friends. And that at the time when you could buy a house, wait 6 months and have a 20% deposit on your next one. Similar story for the children of middle class parents we have met up here, but a little less prevelant I think.

I heard a commentator on r4 the other day referring to our parents' generation (assuming you are 30 something like me) as the generation who had everything. Double housing boom, 20 years of falling cost of living, good interest rates for both saving and borrowing and possibly most importantly, the last of the "good" pensions to cover excessively long retirements. There were a few blips along the way, but nothing like the current situation.

We however are screwed. That's why I will inherit my father's field, and it will be divided in two between myself and my brother.

gtvlusso

I am wondering if this is a Geographical issue - seeing as most of that group of friends are London based as are their families.

I.e. the costs to live in London are high, the wages are higher - but as we all know house prices and cost of living has far exceeded income.

Are we now bearing the financial load of the baby boom generation?

veronese68

We managed to buy a nicer house than we would have courtesy of the soon to be mother in law popping her clogs. That was over 16 years ago. The house is worth over 4 times what it was then. I could never afford to buy my house at current prices. There is a 2 bed semi a couple of doors down from me for sale at £465,000. How can a young couple afford that without a helping hand or very well paid jobs?
prices are still too high necessitating some help in a lot of cases. I know many people that cannot afford to buy and have to rent.

asprilla

Wife's parent's paid for the wedding (they are traditional like that) and so my folks gave us the equivalent cash towards the house. That, plus my wife's redundancy was out deposit / fees / decorating money.

Most of my mates got no help at all, but some had their properties bought out right by the parents and many had parents act as guarantors on their first mortgages.

First.Aspect

gtvlusso wrote:

I am wondering if this is a Geographical issue - seeing as most of that group of friends are London based as are their families.

I.e. the costs to live in London are high, the wages are higher - but as we all know house prices and cost of living has far exceeded income.

Are we now bearing the financial load of the baby boom generation?

In answer to your last question, yes. Each of us are supporting at least twice as many retirees as we should be.

No, its not a London thing. London is a salary and property bubble but I would say it is more common down there not because it is more expensive but because there are proportionally more affluent people.

You could argue that property is more than more expensive in London even taking into account the proportionally higher salaries. However with the exception of the property values which are expensive in a truly global sense in London I don't think prices are far off being proportional. And property prices far outstripped salaries everywhere. Do you know where property prices rose fastest in the early part of the 2000's? I read that it was Hamilton, just outside Glasgow.

If you live in the SE you have to accept that London is big, in order to find comparable prices for comparable properties. In smaller cities you can afford to live closer to the centre, but then there's a lot less in the centre once you get there. You can't have it both ways. So I think its fair to compare the price for a house in Edinburgh aroundleafy Georgian suburbsville (maybe 5-6 miles from the centre) to somewhere in, say, Wimbledon or even Surrey. Both are about 30-45 minutes by public transport from the centre. No doubt you could come up with an Oxford or Bath analogy also, etc.

Once you do that and factor in a minimum of 25% salary discrepancy in the professions, certainly from Edinburgh wages, London prices are not so far off the mark I don't think.

I could be raving though.

dhope

I did get about 30k from parents as shares a long while ago. With all the up and downs in the markets etc that 30k is now worth a little under 30k :x
I've saved a similar amount that'll go toward the deposit on the house when I finally get on the ladder.
Parents wont be able to lend any more, they sold most of their assets when they moved out to Kent so that they could be mortgage free with a nice house on a few acres.

So yes, I got some help saved up from years ago but it wasn't specifically for a house (brother paid for a Masters course with his for example), it'll just end up that way.

A mate who recently bought got around 100k assistance though, kind of like an advance on his parents' will...

bails87

Sketchley wrote:

bails87 wrote:

Sketchley
It might be hire purchase, or contract hire, or something like that, don't know the specific terms.

NP.

The implication was your friend had the money but chose to buy won via credit just to get credit rating. That is madness pay for car on a credit card then pay off the credit card next month. Instant good credit rating, zero cost plus cash back with the right card.

Oh no, she didn't have the cash waiting, she'd only been out of uni for a year, after doing a degree and a masters, so she was working, but I doubt she had any substantial savings.

As for the second part, apparently (I work with someone who used to work for a very senior person in one of the big banks) that doesn't always work, it helps to have the debt and pay it off over a longer period of time. So the bank still gets the original amount back, but they also make a bit of money off you, apparently that helps to encourage people to lend more money to you.

londonlivvy

I have a couple of friends whose flat / house was bought outright for them by parents. And know of several who had a helping hand.

In fact the only people who've managed to buy without a helping hand were either:
- not in London
- if in London, in a well-paid profession or in a couple so pooling resources

Years ago I was looking at buying my first house - about £55k - and whilst I had some savings, I didn't have enough to pay for a deposit and legal fees and furniture and so on. So my parents decided that my sisters and I needed money more when we were trying to get started in life than when they died (their words), so gave each of us a sum of money to use as the deposit.

Even more importantly, though, my dad helped me through the house buying process, explained the difference between the different types of mortgages, told me why it was a bad idea to accept the mortgage offers of 5x my salary, talked me through my monthly budget, helped me paint the house, fix the sink, put up shelves and all those household things that I hadn't got a clue about.

Clever Pun

I know a few who have been lucky enough to have parents help to varying degrees.. couldn't really give %'s though

we managed ourselves bought low, sold high.. bought higher

Sewinman

I have been offered a deposit for a house from the parentage, but I actually can't be bothered to accept it and buy...too much hassle and stress.

All my peers have had help to a varying degree.

rubertoe

House prices are ridiculous - we paid near 200k for our 2 bed flat in North london and that was a really good price (just over 8 months ago) - and only because the sellor wanted a quick sale and we wernt part of a chain!

i'd imagine that most people these days will need some sort of help as saving for a deposit can take a long time and a lot of sacrifices.

nicktheluddite

I know that my folks will help out when the time is right and lots (most?) of my friends have been helped out by their folks too. I would speculate that they have received tens of thousands of pounds. We are generally professionals who live in the south of England.

I'm not very pleased that this is how things work though - it's all very nice if you are in my position, but there are obviously plenty of people who are not. Don't know what the solution is either........

bails87

I think the problem is that once you move out, you're paying so much on rent that you can't afford to save for a deposit (for a lot of people anyway).

bails87

nicktheluddite wrote:

I'm not very pleased that this is how things work though - it's all very nice if you are in my position, but there are obviously plenty of people who are not. Don't know what the solution is either........

Build more houses. NIMBYs don't tend to like that though.

First.Aspect

bails87 wrote:

nicktheluddite wrote:

I'm not very pleased that this is how things work though - it's all very nice if you are in my position, but there are obviously plenty of people who are not. Don't know what the solution is either........

Build more houses. NIMBYs don't tend to like that though.

Given how much they probably had to pay for theirs, do you blame them? You don't own a house, do you?

mudcow007

the thing that gets me about the "i cant afford a house in blah blah" if you cant afford a house in a specific part of the city you will have to look else where unfortunately

this is what we had to do, my girlfriend is from one of the nicer ends of Liverpool (yes there is a nicer part) but there is no way we could have afforded to live around there so we looked out of the area but still within easy distance

if that makes sense?

First.Aspect

rubertoe wrote:

House prices are ridiculous - we paid near 200k for our 2 bed flat in North london and that was a really good price (just over 8 months ago) - and only because the sellor wanted a quick sale and we wernt part of a chain!

i'd imagine that most people these days will need some sort of help as saving for a deposit can take a long time and a lot of sacrifices.

I've just got to warn everyone who is posting at work NOT to google "rubber toe".

rubertoe

First Aspect wrote:

rubertoe wrote:

House prices are ridiculous - we paid near 200k for our 2 bed flat in North london and that was a really good price (just over 8 months ago) - and only because the sellor wanted a quick sale and we wernt part of a chain!

i'd imagine that most people these days will need some sort of help as saving for a deposit can take a long time and a lot of sacrifices.

I've just got to warn everyone who is posting at work NOT to google "rubber toe".

LOL - why would you in the first place....

bails87

First Aspect wrote:

bails87 wrote:

nicktheluddite wrote:

I'm not very pleased that this is how things work though - it's all very nice if you are in my position, but there are obviously plenty of people who are not. Don't know what the solution is either........

Build more houses. NIMBYs don't tend to like that though.

Given how much they probably had to pay for theirs, do you blame them? You don't own a house, do you?

"I bought my house years ago when I was lucky enough to be living in a time of high wages and cheap houses, so no-one should be able to build any more houses, giving young people and new families decent places to live, because that may affect the value of my house."

Yep, sounds peachy to me.