Bank of mum and dad

[Sandra6]

On morning telly just now (I'm havng a day off it's obligatory to watch!) they were discussing grown up children living at home due to the ridiculous cost of housing and the difficulties of saving for a deposit.
It seems that the norm these days is for parents to stump up the cash, and there are even deposit schemes and special mortgages to make it easier, so I'm told.
"Children" are living at home until their 30's aswell.
I don't get it.
My eldest moved out at 19, it wasn't his best idea, and he's bounced back a few times , but for the most part he is now independent at 23. We've actually just made the decision not to give him anymore cash as it became apparent that he really wasn't planning his budget through as I was his back up plan. "ooh I have all this money, I must spend it. Oh what about the bills? Never mind Mum will pay" It was time for a wake up call!
From my experience of parents with older children it seems other people don't pull the plug quite so early on.
Mr6 works with a lady who pays for her daughters fuel, despite the daughter having a well paid job.
We know one chap who has two grown up daughters back at home and he bought them a car, and meets all their demands for refurbishment. And others who are forgoing their own treats in order to give money to working children.
My other two older ones are at uni, and apart from paying their initial rent and moving costs they manage by themselves - one worked and saved, the other just doesn't spend a lot. If they get stuck they ask for help - but they pay the money back asap. I really don't anticipate them moving back home -apart from as a stop gap - when their studies are done.
Perhaps it works differently for us as our "bank" is never particularly full to start with , but even if we were more affluent I doubt we'd have funded them any further. I certainly won't be buying them cars or paying deposits on houses.
Why can't young people rent? We didn't buy our first house until we were in our 30's. But we lived in rented until then. DIdn't do me any harm ;-)
Just curious on other people's takes on this.

 

[summerdays]

We are only just entering this phase, the eldest is out of uni and now earning. We did pay her accommodation during uni but the rest was down to her. She has a car but only because my Mum gave up driving so gave her her 20 year old Nissan. But it's here at home because she doesn't need it at the moment and the insurance is cheaper (off road parking not city centre location). She has had loans from us but has paid us back, and offer to pay for things when we are out such as a round of drinks etc rather than expecting us to pay for everything.

A friend of mine has made her kids pay for lots of things such as phones (at age 12, whereas we went down the birthday present route for things like that), and even sports equipment. I assume her kids will be very savvy when it comes to money.

The hard thing is who they mix with, through uni my eldest shared a house with a group of friends, the parents of one paid for everything, including mega Tesco shops, and £200 shopping trips for clothes and makeup. Often a lot of the food would be given away or thrown away as it would go off before it could be consumed. Of course her parents have bought her a car, a nice one! She didn't seem to value money and spent tons (my daughter benifitted from some cast offs!)

Renting seems to be far more expensive than in my day.

 

[biggs682]

i stayed at home till i was 36 , paying my share of the household bills etc etc

yes it was an easy life but it was my choice and i am sure my parents didnt mind

we only have one at home and he is 22 cant see him leaving any time soon , at times it feels like we are subsidizing his back packing trips etc etc the other is renting and cant afford to get a foot on the ladder

 

[Dan B]

Probably depends a lot on where in the country you are. Remember the days when you could get a mortgage for 3x annual income and expect that amount of money would buy you a house? That's not how it works any more

http://www.telegraph.co.uk/finance/...fordable-London-boroughs-in-which-to-buy.html (note this is a couple of years out of date)

 

[Paulus]

Rent around the London area is very expensive. A one bed flat will set you back about £1200 pcm.

 

[Drago]

Left home at 18 myself, stood on my own two feet ever since, never had a penny from Mum or Dad (though I borrowed the money from my Dad to pay my divorce bill, but paid it all back).

My three oldest had all gone by 19, though I never pressured any of them to do so.. They're simply independently minded, confident, and wanting a crack at the big wide world. They all paid rent to me once they left education, not market rates but enough to learn that it's a serious game, and didn't eat anything out of my fridge they hadn't bought themselves. The only exception to my 'no free rides' rule was daughter #3 - I paid for an intensive driving course and she passed her test within two months of 17, and my Dad bought he a new Peugeot 107. This was because Mrs Drago was quite poorly by then and if I were to carry on working I needed help and support, so me and Dad did that on the understanding she used the car to help me out, which she did.

I'm inclined to agree to some degree with the OPs rant. Was a very interesting article on the Beebs website last week about first time buyers and how they afforded it - the universal answer from each couple was "don't spunk money up the wall on flash cars, flash clothes, iPhones and foreign holidays, and lo and behold in a few years we all had a deposit" - it is often not possible in life to have everything you want at once. The principle is pretty obvious. London might still be very difficult, but the rest of the country seems perfectly achievable using their principles.

 

[Joffey]

Rent around the London area is very expensive. A one bed flat will set you back about £1200 pcm.

Maybe don't rent in London? There are plenty of places in the UK just as vibrant and cheaper.

 

[alicat]

Just found out that my brother isn't paying any rent or council tax for the property he is living in that belongs to my parents. And he is working and his next big birthday begins with a six.

 

[nickyboy]

Spending other people's money is great at the time but it's a bad habit to fall into and difficult to crawl out of

I'm fortunate. Despite son#2 going to quite a fancy school and being largely surrounded by kids from comfortably off families, he is developing a very level head for money. Instead of buying his non-essential clothes, we started giving him an allowance which he had to manage himself. Recently he asked us to stop paying it because he wasn't spending it and it was building up in his bank account.

Last summer (it was GCSEs so he had about 3 months off) he set up his own gardening business. I bought the mower for £100 as my contribution, after that he was on his own. He built up a loyal client base that he will be able to access again this year and made a lot of cash for a 16 year old. That's in his bank account and he's saving it for the future. To give an idea of the amount, if he does this for say two more summers, he would probably have enough for a deposit on a small house if that's what he wanted to spend it on

I've tried to instil in him the value of money and that I have to work hard to get it. It seems to be paying off

 

[Milkfloat]

I left home at 17 to go to Uni and barely went back during the holidays. Quite frankly student life was too good to go home. I worked from day 1 whilst doing my course (bar work and bouncing), but crucially was not paying for the course and got a bit of a grant - so incredibly lucky. Without those I would have been in serious debt. However, back then (92-96) I paid £25 a week rent in horrible shared houses with no heating, phone, washing machine and even one year no fridge because the landlord took it and gave it to our neighbours who were also renting and complained more than us.

Nowadays it seems that people have a few more rights and expectations about what they need, things I saw as luxuries. Good on them!

I was also lucky that when I was buying a house my wealthy grandmother gifted some money to help with a deposit, I had enough to get a mortgage as back in the late 1990's it was easy to get a mortgage, but it helped us get a house, help fund the considerable DIY and sell it at the right time to move to a considerably bigger house now.

Bank of Mum and Dad is fine and being honest - my kids don't want for anything. However, they have to earn it, but I think I am the worlds most generous employer, it does not take them too much to earn their pocket money, simply setting the table, clearing the dishes and tidying their room is enough to earn their school uniform and packed lunch and a bed to sleep in.

 

[Milkfloat]

Just found out that my brother isn't paying any rent or council tax for the property he is living in that belongs to my parents. And he is working and his next big birthday begins with a six.

My son is 6, I am not quite cruel enough to demand council tax from him, although rent sounds like a good idea.

 

[Sandra6]

A lad who was friend's with no2 son came into work the other day, haven't seen him since junior school and he's now 19 so I asked what he was up to, was he working etc. His reply left me a little open mouthed to be honest.
He said he didn't have a job, because he didn't need one. He lives at home so has no expenses and when he wants "beer money" he does a few jobs with his dad (dad is self employed tradesman but I can't remember if he's a plumber or electrician) . I pointed out that at some point he might need an actual job and he said "I'm just enjoying being a 19year old"

 

[jonny jeez]

I have never understood how older offspring living with their parents and paying nothing towards their keep are ever going to learn how to get by in the real world. I couldn't wait to leave home and be independent, and lived in a succession of hilariously awful house-shares and bedsits. Do bedsits even exist any more? I don't think these young people would deign to live in the conditions we put up with, but we had so much fun. I think they're missing out on a lot.

I agree with this. There is a culture of over entitlement amongst the post grad generation that risks spoiling their experiences...or maybe it will just provide different ones.

There is a "but" here though. I don't feel guilty but I do feel over privileged at the sheer value of the assets that I have, which have through no effort on my part grown out of all proportion. I feel a responsibility to share this good fortune with my kids in some way, most likely via leveraging these same asserts to created deposits etc.

I guess the question needs to be how will our grandchildren grow up,if their parents accepted this as the norm...where will it end up

 

[PK99]

Why can't young people rent? We didn't buy our first house until we were in our 30's. But we lived in rented until then. DIdn't do me any harm ;-)
Just curious on other people's takes on this.

Full of admiration for you and your kids - them for being self sufficient, you for raising them to be, but specifically on your last point - the world has changed a lot since you and I were setting out.

My first house I bought I 1979, two years out of Uni, with zero money in the bank - Deposit was £500* loan from my Dad, £500 interest free loan from my employer (BNFL, Sellafield) and a few hundred saved in the few months it took to buy plus some on my credit card. On her recent move to Canada my daughter has let out her 1 bed London flat (yes, we helped her buy) for £1550 per month, roughly equivalent to the mortgage interest on a 80% loan for the flat, the tenants are on joint salaries of £90k plus (trainee solicitor and executive assistant at a bank) and cannot yet afford to buy in their mid 20's anywhere close to their time hungry jobs.

Outside London people face the same problem - lower rents, but also lower salaries - the market has moved so much that many find it impossible to save for a deposit while renting.

*on which I agreed to pay bank interest rate with no capital repayment

 

[Drago]

Since I joined the big bad World at 18 I've heard people complain about the difficulty of saving for a deposit while renting. It was nothing new then, it certainly isn't new now, and while property prices related to earnings have undoubtedly risen, so has the cost of other sizzle they waste money on.

Next time someone makes that complaint, ask them how much their iPhone cost them. There will be genuine hardship cases, but that's always been the true. However, an equal or greater number will make the same complaint while wasting their liquid funds on irrelevant consumer crap.