Bank of mum and dad

[Dave 123]

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.

I read that article too. Just plain old common sense.
The Beeb ran one a year or so back that went something like this

'A mortgage?!?! How can we afford that after eating out 3 times a week, clubbing at the weekend and 16 skinny frappuchinos?'

 

[Crackle]

I'm enjoying watching son1 at Uni now. His independence is fierce and the lessons of the first term were painful as he realized that the amount of money he had, the biggest ever, wasn't quite as much as he thought, despite me making a spreadsheet for him before he went. I expect son2 to be quite similar. I have no fears for them and hope to be able to give them the leg up they'll need in the future, a leg up my generation didn't need.

I did take great amusement from him coming back one wknd for something he had to come back for. The first clue it was all going wrong was when a text arrived the wknd before asking for a pick up that night. It soon became clear he'd got the wknd wrong and then he went to the station without his ticket, missed his train and had to pay top dollar for another, all for the wrong wknd. Such lessons cannot be taught by parents. I think the cost of that mistake smarted and did for his plans of a Xmas adventure.

 

[Salad Dodger]

Our daughter has always been careful with money. Oh yes, she knows how to spend it, but she has always understood that it has to be earned, and so spending decisions have to be carefully pondered before going ahead..

I had managed to save a little to help her through uni, but she had to put some of the cost onto student loans and is now paying that off from her salary each month. She has bought her own car, but after seeing how much it cost to run a "boy racer" Suzuki for a few years, she has now got a cheap and cheerful Fiat Panda which probably costs about half as much to run over the course of a year.

She lived for years in one rented flat or another, but when my mum died and her house was sold, we were able to lend our daughter the money to buy a flat in her adopted home of Brighton, and she repays us an amount monthly. My mum and dad struggled to move out of a tiny rented house and to be able to afford to buy their first house when I was a kid, so I know they would have been delighted to see Miss Salad getting on the property ladder, with their "help".

 

[Sandra6]

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

I think you are mistaking me for a much older person, when you bought your first house I was just starting primary school!
Our first home in 1993 was an MOD married quarter, and yes we were thoroughly spoilt with low rent, no council tax or water rates to pay and a nice man who popped round and fixed things for me. When mr6 left the RAF we had a series of council and housing association properties up and down the country, followed by a private rental in 2003. We bought our first property in 2005 for £70000 with a 105% mortgage as we didn't have a deposit or money for fees. We put the property on the market 7 years later and it took 5 years to sell, during which time we moved into another rental property. We eventually sold it for just £55000 barely paying off the mortgage. We have only just managed to scrape enough together to buy our current house and could only do so because of the help to buy scheme, I'm not quite sure what sort of a pickle we'll be in at the end of the year when we have to remortgage.
Personally I think property ownership is overrated.

 

[PK99]

[QUOTE 4685007, member: 45"]It's the mortgage deposit that's the killer these days. We bought 20 years ago and the deposit was £2k on a £40k terrace. The same house is now £180k with a £9k deposit. 450% increase. The salary I was on then would now be 130% more.[/QUOTE]

35 years ago, a mate who was a newly qualified optician in London changed jobs and got a company car. He sold his pretty basic car and used the proceeds as full deposit on a house in Greenford (between Ealing and Southall). A similar house is now £750,000 plus ie 10% deposit is minimum £75,000 - somewhere between 1.5x and 2x a newly qualified opticians annual salary.

 

[mythste]

Heh, this is interesting!

For context, I'm 26, and was bloody awful with money up until about two years ago. Im fortunate that if I got really stuck, I could speak to my parents and get a minimal loan (which I always paid back, though usually from peter to paul...)
I'm pleased to say that I've since all but paid off my debts, but the temptation to try and keep up with everyone is difficult to ignore. I've trashed my credit rating for the forseeable future and that's something I wish I'd have had a better understanding of at the time (Parents, Please, teach your kids the importance of a credit rating! I had no idea!)

The Idea of a) me saving up for a deposit in the next 10 years or b) having my parents pay it for me is both ridiculous and just isnt going to happen. Renting outside of London is perfectly do-able for anyone on a reasonable salary - I appreciate reasonable is pretty contextual.

I'm very much of the opinion that I can't take it with me when I die so I don't particularly mind, but that's probably just a poor justification for my being a knob when I was younger.

 

[User482]

I look at employment prospects, cost of education, pensions, rents and house prices, and wonder how young people are supposed to make a start in adult life. It was very definitely easier for me, and if I'm in a position to help out my kids, that's absolutely what I'm going to do. I've never understood why older people seem to take so much pleasure in younger people finding life difficult.

 

[User33236]

I contributed some money to the household, albeit not a lot from a paperound , from the age of 14 and the amount increased when I left school and started a training program with an electronics firm. Never had a penny off my parents and moved out when I was 17, the final straw being my mother stealing the £400 (a reasonable sum of money in 1986!) I had scrimped and scraped to put together to pay for a holiday.

Ironically two years later my mother moved in with me. During that time she never contributed a single penny to the running of the house and left without so much as a 'thank you' when she finally left almost a year later.

Still never had a penny off of either of my parents since leaving home and flatly refused money from my fathers will recently and suggested the executor split it between my kids instead.

My own kids very rarely ask for money but I can often sense when they need a helping hand and send them a bit to help out.

 

[sarahale]

I'm 27 and chose not to go to university because I didn't want to get into debt. Now I have a nice house deposit saved because I am careful with my money, but I can't get a mortgage until I find a better paid job and I can't seem to find one of those without a degree/relevant qualifications which I do not have...I'm in a job which I enjoy but there isn't a great chance of progression within it.

I have just moved out into a shared house, I'm getting a very good deal with rent because I'm acting pet/house sitter whilst the tenants are frequently away. Otherwise there is no way on my monthly wage I could afford to rent anywhere.

As much as I would like to up and leave London to find work somewhere where housing is cheaper I feel that I should first get a bit of a standing experience wise in my line of work, else I won't be employable. Also I enjoy my job which is a rare thing, if I have to sacrifice where I live and even live with my parents again to keep it for now I will do that.

I was living pretty independently at home before I moved out, paid towards bills, bought my own clothes and food etc. So moving out hasn't come as much of a shock and if I'm careful with what I spend then I can still save some as well towards my future.

If something went drastically wrong I'm sure my parents would bail me out short term but they would expect full repayment as soon as I was back on my feet. And knowing my dad he would charge interest on top

 

[summerdays]

I look at employment prospects, cost of education, pensions, rents and house prices, and wonder how young people are supposed to make a start in adult life. It was very definitely easier for me, and if I'm in a position to help out my kids, that's absolutely what I'm going to do. I've never understood why older people seem to take so much pleasure in younger people finding life difficult.

I guess it's not about making their lives difficult but the need for them to understand the value of things, and that money doesn't grow on trees. If any of mine come back to live at home I'm going to charge them rent (but probably below real levels) and then when it comes to them buying if we can afford to then some of that money will be used to help them put down a deposit. I'm not going to help them buy phones or flash cars, that's up to them to work out how to budget for.

 

[vickster]

My parents said that they would pay for my brother and I to go to uni (living costs, no fees in them days) and to get us into our first property (2 bed flats). This they did with a 30k deposit in the London area (my brother in Clapham, I in Beckenham in the mid-late 90s, equated to around 35% of price probably), in the end, this was in the form of inheritance from deceased grandparents
...things have changed somewhat and a 30k deposit would be barely 5-10% in those parts.

After uni, I lived at home for less than a year and then I bought. I did pay the folks some rent in those days

Other than that, they paid car insurance for a couple of years (probably when it was £500pa max for young drivers, in a small hatchback not the craziness of today)

On the advice of their accountant I believe, we did each receive a 25k lump sum a few years ago. I saved mine (mostly, might have bought a bike ), my brother spent his on home improvements.

Other than Christmas & Birthdays, nothing these days. If we go out to eat as a family, we all take it in turns to pay

I have no issue with parents supporting their kids in beneficial ways if they can afford it. Although the kids should also take a responsible attitude to their money

I now want my parents to enjoy their retirement, at 44, I don't need their money And as much as I love them, there is no way I'd want to live with them, couple of days is enough!!

 

[User482]

I guess it's not about making their lives difficult but the need for them to understand the value of things, and that money doesn't grow on trees. If any of mine come back to live at home I'm going to charge them rent (but probably below real levels) and then when it comes to them buying if we can afford to then some of that money will be used to help them put down a deposit. I'm not going to help them buy phones or flash cars, that's up to them to work out how to budget for.

I suspect that young people are very aware of the value of things. For example, the debt they will accrue if they go to university, the percentage of their salary they will have to spend on rent, or the likelihood of being comfortable in old age. Yet despite the significant changes that have occurred in my lifetime, we are regaled with stories of how people left home at nine years old, buying their first house with the money saved from their paper round.

 

[nickyboy]

The issue of raising the deposit required to buy house is an interesting one to me. Of course when I was looking at my first house the multiple on my salary was manageable and I had pretty easily saved enough for the deposit (I think the house was £32K so I put down £3.2K). Fast forward to 2017 and it remains the case that in towns like Glossop if you're not over-fussy about exactly where you want to live, you can get a house at a price a couple could reasonably save up a deposit for

But when you go elsewhere like London and those towns in commuting distance of London it seems this is no longer an option. Young couples just can't save up enough cash for the deposit. I presume what I actually happening now is that Grandma had her house which, given it is in the SE, is worth a load. She dies and the cash passes to the grown up next of kin. These then give it/lend it to the next generation down to give them a deposit and maybe a slightly lower mortgage?

So a largely circular movement of cash which really depends on relatives passing on cash to those when they need it

 

[PK99]

But when you go elsewhere like London and those towns in commuting distance of London it seems this is no longer an option. Young couples just can't save up enough cash for the deposit. I presume what I actually happening now is that Grandma had her house which, given it is in the SE, is worth a load. She dies and the cash passes to the grown up next of kin. These then give it/lend it to the next generation down to give them a deposit and maybe a slightly lower mortgage?

So a largely circular movement of cash which really depends on relatives passing on cash to those when they need it

Very common pattern. I know a number of people who have stepped aside from all or part of an inheritance from their parents and let it pass directly to the Grand kids.

 

[swee'pea99]

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

Funniest post of the year!