Helping your children get onto the property ladder
Many people in the UK are renting their property. And according to recent research by The Institute for Fiscal Studies, of those who want to buy a property, around 40% of young adults can’t afford to purchase one of the cheapest homes in their area, even with a 10% deposit.
With figures like this regularly in the news, it can be easy for potential homeowners to get disheartened. Whether you’re a parent whose children are trying to save up for their first home. Or you have little ones and you want to help them in the future, there are plenty of ways you can help them get onto the property ladder. Here’s how:
If your children are still young, you can set up a savings account for them. Setting aside some money once a month to put into their savings, can soon add up. And by the time that they’re old enough to start thinking of buying somewhere, you may have saved enough for a deposit.
If they’re a little older and you’re thinking of setting up a savings account for them now, there’s still the possibility to save up the money needed to cover things like legal fees. You could also use the money saved to buy furniture for their first property.
Be sure to shop around for ISAs that offer good deals on interest rates. This could help the money you put aside for them go even further.
Another way to help your children buy their own home, can be by helping to cover the cost of their rent while they save up for a deposit. Perhaps you can use any money you saved up for them when they were young to pay for this, or you could contribute a set amount each month.
Alternatively, if finances won’t stretch that far, you can help your children find somewhere to rent. You can help them find the apartment that offers the perfect balance between being in a good location, and cost-effective so they can save for their first home. Lettings specialists such as Andrews offer comprehensive advice, as well as a range of properties to rent.
Be a guarantor
Being your child’s guarantor can help you avoid having to use savings to cover the cost of a deposit or other fees. Plus, not only does it offer an added guarantee for the mortgage provider, it shows that you have faith in your child.
There is a risk with this, however. If your child falls behind on their mortgage payments, you will be responsible for making the repayments in their place, and this can have a knock-on effect with your own household bills, as well as your credit score. So think carefully before taking this route.