Help daughter to buy her first property

I have given my eldest son around £15000 over the last few years as he was having money difficulties which were not his fault. My other two children are aware of this and are happy for their brother to have this help.

My will, done with a solicitor, states that my younger children each get £15000 on my death then the remainder is split equally between my three children. Again, I have made sure that all my children are aware of this and in agreement.

I helped two of my four with their house deposits, freely given, not loaned. I took the (very small) risk of assuming I wouldn't die within seven years!

Now, I do feel somewhat obliged to move, sooner rather than later, to give the other two the same amount - although, if things should change, I trust them to sort it out and make things fair - no solicitor needed.

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The whole situation re buy to let has changed - and quite right to

why dont you buy the property on a buy to let mortgage and charge her a minimal rent for it,that would let her save towards eventually buying it from you and stop any cries of unfairness from your other children.We bought both our childrens first flats this way and it worked well for us all

We helped our oldest daughter with her first property purchase, but only the deposit. She had got a mortgage which she paid. We had the solicitor put the flat in joint names with us at first, because she was with a very unreliable partner at the time (they split up not long after.)
Later we asked the solicitor to change it to her name only.
The rest of the family didn't seem to mind.

Thank you all so much for your input, I have found all your advice and comments invaluable and they have helped resolve some dilemnas I have been grappling with. It's very difficult having three daughters and trying to be fair to all of them considering each one has different lifestyles/salaries etc., etc. I am hoping that we have bought our daughters up to be compassionate, caring and tolerant human beings and that they will understand why we want and indeed need to do in order to help our younger daughter. Once again thank you all

Barclays have a deal at the moment. Parents can lodge a sum with them , they give the mortgage to the purchaser and if the repayments are met for three years the parents get their money back. With interest for what it's worth!
If your daughter has two years accounts she should be able to get a mortgage. If she has saved half the value of a property she must be doing quite well and she would have a great deposit.

Tallulah your daughter's had a tough time recently so I can understand you wanting to help her have some security. As others have suggested there are ways to do this whilst safeguarding your money and being fair to her siblings.

This dilemma is the same as threads regarding how much to leave each adult child in a will, with siblings having different standards of living, income, special needs, etc.

Your money is yours to do as you wish of course but if you explain to the others that the amount will be taken out of any inheritance it should keep the peace!

I agree M0nica, or give all your AC the same amount as you give ydd.

The two with homes have other different needs. Everybody would be happy.

We have our youngest daughter a substantial deposit to get on the property ladder. As she was buying with a boyfriend we got a legal agreement drawn up that if they split up and sold the property this deposit would be returned to us before any equity was split.

For your daughter's long-term financial future and family well-being, if you lend her money have a written agreement with her for the repayment together with penalties if she does not make her payment

I have lost count of the threads started on GN about family unhappiness and breakdown caused by the corroding effect of giving money to children and not keeping them firmly committed to repayment schemes, even when times are hard for them.

Thank you Tallulah, we have had a family member in a similar situation. The course chosen was a it of a mix - it involved keeping a formal track of loan repayments, with the final amount to be taken out of the inheritance.
However, I would say that the estate was under the inheritance tax threshold, and did not involve such a large amount. But if you are interested, this is how it worked:

Let us say 3 children, A B & C, all to inherit equally once both parents are dead. Say estate is £200k actually owned by parents at time of death.
A owes £100k under the arrangement described. They nominally 'repay' the estate, to make it back to its 'real' value: £300k. It is then distributed: £100k to each child. A gets nothing at that point.

The serious drawback here is if your estate is likely not to allow such a distribution, so that A would owe their siblings, but might be unable to pay them. Depending on the amounts involved, that might be a risk worth taking.

Many thanks for all your replies, I knew you lovely knowledgeable ladies could help, definitely a lot to consider and think about, especially the difficulty of how my other two daughters would think about it. It's really difficult as my younger daughter won't be able get a mortgage as she works freelance and does not have regular income. She has also had a really rough time of it as her partner committed suicide two years ago and I know she feels she needs to have some security, she has been given notice to quit her home again which has really upset her. My other two daughters both have their own homes but they still may feel as though the younger one is been given favourable treatment. I need to speak to both of them, wish me luck. Once again thanks for taking the time to reply to my post.

Oh sorry I didn't read carefully enough. I now see no mortgage involved.

Mortgage companies can be difficult if you loan the money. They do not like another party having a call on the value of the property should the loan default.
I would take financial advice.
The help we gave our DSs had to be outright gifts, stated in writing, to satisfy the Mortgage companies.

I think the first thing is to decide what you actually want to do, and especially how it will impact on any of your other children, or your daughter's[future] partner.

You might not need a financial advisor, but think about the following:

Are you going to charge interest?

Are you going to ask for regular repayments, and if so, what is the start date? What happens in the event of her redundancy / illness?

You could ask for an interest in the property (this can get complicated,but can protect your interest)

You could give a long-term loan, even make it repayable out of of her inheritance on your death[s]

I think you need to get this all considered as it will save you time (and fees!) in the long run.

Lucky girl!

We loaned both of our sons some money to help with purchase of their first homes. They make a monthly payment at an agreed interest rate. Try internet search along the lines of 'legally loaning money to a child' which should give you guidance on what HMRC allows. In some cases if you were to pop your clogs within 7 years of the loan the loan would be included in your estate.

Firstly, I would get legal advice before going anywhere near a financial advisor. There are a lot of scenarios to consider - would the house be in all your names or would it be in her name alone and you would be putting a charge on it? Is she single? What if she marries? Is it going to be a proper loan with a repayment schedule?