The Lemon Fool

Having worked abroad for half my life, I’m in need for some advice.

Our youngest is a computer programmer and is currently teleworking from my mum’s house in Cambridgeshire. The company is between Sheffield and Hull. Now that Covid crisis is over, the idea is that he will rent an apartment up there. My mum loves him to bits. He’s introverted, polite, helps her around the house, but it’s for his own good.

My wife suggested that we could perhaps help him to actually buy a flat.

My own feelings are very positive, though I think he should spend at least a year checking out the areas etc. He has a good friend there so will gain some local knowledge.

The real question is, should we – or are we allowed- to give him all or some of the money, or should we make it a loan? He still has a student loan hanging over his head, since he went to uni just after they increased from 3K to 9K!!

Unlike his crazy older brother, he is very careful with money so I would have no hesitation in helping him. I’m just worried about the legal aspects.

Could we buy an apartment and gift it to him? Or just give him the money? How does it work?


Steve

If you trust him to be sensible, the simplest thing is just to gift him the cash.

He can then decide whether he is better with a large deposit and reducing his mortgage payments or paying some off a student loan, or open a SIPP, etc.

You probably don't want to go down the route of buying a second (?) home for yourselves with the consequent tax ans stamp duty implications, and then giving it away.

As it appears there is no rush, renting somewhere near Doncaster or Scunthorpe would be an igea, there are other places along the M62/M180 corridor, but those 2 i've been to a few times and seemed large enough to be bearable. Personally I'd avoid Castleford or Beverley, purely as I shared a house with a girl from one and dated a girl from the other when at uni, and I might run into their brothers.

Paul

A joint borrower, sole proprietor mortgage may possibly be an option worth investigating - as always it depends on your own circumstances and specific aims.

ikethespike wrote:A joint borrower, sole proprietor mortgage may possibly be an option worth investigating - as always it depends on your own circumstances and specific aims.

You can of course do what you like with your own money. If you give him significant money or a flat then bear in mind the IHT implications. The seven year rule

Cleaner I would have thought just to let him find a flat and give him all or some oof the cash to buy it.

Your initial post suggests that there is another child. In similar circumstances I always ensured that I treated them the same but that may not be a problem for you. I would not lend him any money because how do you enforce any default? You may not think that that will happen but how can you know?

Dod

Firstly and on the record, Beverley is a great place to live. lol: .

But not for younger people I'd suggest.

I'd stay clear of buying an apartment and consider renting for the first year. I think house prices are falling as there seems to be a shortage of first-time buyers taking the plunge. Which means one thing. House prices will have to come down to accommodate affordability and entice the FTB's back into the market.

Also bear in mind that Yorkshire isn't the land of apartments that resell well. We live in old 2 up 2 down terraces that the Germans didn't bomb. Introverted or not I'd also suggest he needs to be in an area with people of his own age and who share similar life values.

As for making anything a gift or a loan, this is entirely your choice. We gave our daughter a bank account and a £50 per month allowance when she was 11. She’s 15 now and is confident when using her debit card and shops around for anything she is considering buying. On her 14th birthday we were able to commit to putting £9K per year into a JISA for her. At 18 she will be allowed to do with that money as she sees fit. We haven’t done this because we had to. We don’t expect her to do anything in return. On top of her JISA her allowance has risen to £150 per month. She can buy clothes, Christmas and Birthday presents and learn the value of money at the same time. She has earned this money. Each year when we she brings her school report home her allowance is increased. After all she’s earned it. She looks after her money, that she has earned. Each year, from her own volition she gives us about £1-1.2K from her bank account towards her JISA. She has shown great maturity with her money.

You have to decide how you support your son, but I’ve mentioned this before in another thread. Whatever you do I think it should be an action from the heart and any thought of it being a loan or similar should be as a last resort if you feel he doesn’t value money too well.

AiY(D)

Just a cautionary tale. When my daughter left Uni, she got a job in Oakham. We talked about getting her a house and she was enthusiastic! She swore blind she would be staying in that job for at least 5 years. So we bought her a very nice house in Barleythorpe, a mile and half out of Oakham.

All perfectly set up now. 9 months later she announced she was leaving that job and house and going to live elsewhere

It was OK because it was eminently lettable so she let it out, but when buying something consider that circumstances can change!

scrumpyjack wrote:Just a cautionary tale. When my daughter left Uni, she got a job in Oakham. We talked about getting her a house and she was enthusiastic! She swore blind she would be staying in that job for at least 5 years. So we bought her a very nice house in Barleythorpe, a mile and half out of Oakham.

All perfectly set up now. 9 months later she announced she was leaving that job and house and going to live elsewhere

It was OK because it was eminently lettable so she let it out, but when buying something consider that circumstances can change!

Yes but it's now her problem, assuming that the property is in her name. So I am not sure of the ‘cautionary tale’ in this matter. You gave her or bought for her a property in her name. It is now one of the considerations for her in making a move. It is off your balance sheet so at least for you, there is no ‘cautionary tale’ to be concerned about.

Dod

Dod101 wrote:

scrumpyjack wrote:Just a cautionary tale. When my daughter left Uni, she got a job in Oakham. We talked about getting her a house and she was enthusiastic! She swore blind she would be staying in that job for at least 5 years. So we bought her a very nice house in Barleythorpe, a mile and half out of Oakham.

All perfectly set up now. 9 months later she announced she was leaving that job and house and going to live elsewhere

It was OK because it was eminently lettable so she let it out, but when buying something consider that circumstances can change!

Yes but it's now her problem, assuming that the property is in her name. So I am not sure of the ‘cautionary tale’ in this matter. You gave her or bought for her a property in her name. It is now one of the considerations for her in making a move. It is off your balance sheet so at least for you, there is no ‘cautionary tale’ to be concerned about.

Dod

The 'cautionary tale' is that young people who have just left Uni have not had much life experience and may be certain of their career path and future. But then they can find everything changes. The property was in her name so nothing was 'lost', but she then had the hassle of owning a property 70 miles from where she then lived and dealing with the management of it etc. Just 'sub-optimal' with hindsight!
ps it was bought outright with no mortgage, but if it had been bought with a mortgage there might have been problems being allowed to let it. If it was sold then one would have had a lot of transaction etc costs for only 9 months occupation.

stevensfo wrote:
My wife suggested that we could perhaps help him to actually buy a flat.

WTF????

Honestly, have you not been listening to the news?

Anything leasehold is for mugs and fools. He could easily be at the mercy of an avaricious LL keen to milk him of everything possible. DAMHIK.

Help him to buy a freehold house by all means but a flat? Jeez, no!

Mike4 wrote:

stevensfo wrote:My wife suggested that we could perhaps help him to actually buy a flat.

WTF???? Honestly, have you not been listening to the news?

Anything leasehold is for mugs and fools. He could easily be at the mercy of an avaricious LL keen to milk him of everything possible. DAMHIK.

Help him to buy a freehold house by all means but a flat? Jeez, no!

I would have thought that in Yorkshire it is mostly small houses rather than flats anyway. How expensive can a terraced house be in Scunthorpe?

scrumpyjack wrote:When my daughter left Uni, she got a job in Oakham . . .

A lovely town but keep it to yourself. Housing there is still cheap'ish.

Lootman wrote:I would have thought that in Yorkshire it is mostly small houses rather than flats anyway. How expensive can a terraced house be in Scunthorpe?

Shockingly, £55k!

I was imagining about £55....

https://www.rightmove.co.uk/properties/ ... el=RES_BUY

scrumpyjack wrote:

Dod101 wrote:

scrumpyjack wrote:Just a cautionary tale. When my daughter left Uni, she got a job in Oakham. We talked about getting her a house and she was enthusiastic! She swore blind she would be staying in that job for at least 5 years. So we bought her a very nice house in Barleythorpe, a mile and half out of Oakham.

All perfectly set up now. 9 months later she announced she was leaving that job and house and going to live elsewhere

It was OK because it was eminently lettable so she let it out, but when buying something consider that circumstances can change!

Yes but it's now her problem, assuming that the property is in her name. So I am not sure of the ‘cautionary tale’ in this matter. You gave her or bought for her a property in her name. It is now one of the considerations for her in making a move. It is off your balance sheet so at least for you, there is no ‘cautionary tale’ to be concerned about.

Dod

The 'cautionary tale' is that young people who have just left Uni have not had much life experience and may be certain of their career path and future. But then they can find everything changes. The property was in her name so nothing was 'lost', but she then had the hassle of owning a property 70 miles from where she then lived and dealing with the management of it etc. Just 'sub-optimal' with hindsight!
ps it was bought outright with no mortgage, but if it had been bought with a mortgage there might have been problems being allowed to let it. If it was sold then one would have had a lot of transaction etc costs for only 9 months occupation.

Yes I agree with you but quite honestly it is just part of her life experience and she is fortunate to have a property to worry about at a relatively young age, I assume.

Dod

I'd written a longer reply which disappeared when I hit 'submit' but, in short, I favour gifting your trustworthy son the money. I've done the same with my son - of his own free will he intends to repay some money each month, but should he ever want a mortgage in future, his 'debt' to me will not be counted as an outgoing expense he must pay each month.

The only concern I have in your case is whether your son wants to leave a fond grandmother, wants to take your money and wants to buy a place just yet.

Scunthorpe and Doncaster often rank in the top ten of the most miserable towns to live in England.

He'd be better off living in either Sheffield or Hull.

John

redsturgeon wrote:Scunthorpe and Doncaster often rank in the top ten of the most miserable towns to live in England.

He'd be better off living in either Sheffield or Hull.

Of those I have only been to Sheffield and it seemed like a decent town.

I was not aware that such a list existed so I looked and here it is, although the 'winner" is actually Colchester (again, have not been there).

https://www.inyourarea.co.uk/news/brita ... full-list/

Dod101 wrote:I would not lend him any money because how do you enforce any default? You may not think that that will happen but how can you know?

I suppose you tell the child "if you don't pay back this loan as agreed we'll take you out of our wills."

Lootman wrote:

redsturgeon wrote:Scunthorpe and Doncaster often rank in the top ten of the most miserable towns to live in England.

He'd be better off living in either Sheffield or Hull.

Of those I have only been to Sheffield and it seemed like a decent town.

I was not aware that such a list existed so I looked and here it is, although the 'winner" is actually Colchester (again, have not been there).

https://www.inyourarea.co.uk/news/brita ... full-list/

I'm not surprised that Stevenage is on the list. We lived there for four years at a time when the town was growing rapidly and it was the pits! The town centre was depressing. What does surprise me is that Luton is not on the list! When we lived there, people called Stevenage and Luton the 'armpits of England'.

Had we not been in such a hurry, we would have discovered some of the much nicer places to live.

Steve

stevensfo wrote:

Lootman wrote:

redsturgeon wrote:Scunthorpe and Doncaster often rank in the top ten of the most miserable towns to live in England.

He'd be better off living in either Sheffield or Hull.

Of those I have only been to Sheffield and it seemed like a decent town.

I was not aware that such a list existed so I looked and here it is, although the 'winner" is actually Colchester (again, have not been there).

https://www.inyourarea.co.uk/news/brita ... full-list/

I'm not surprised that Stevenage is on the list. We lived there for four years at a time when the town was growing rapidly and it was the pits! The town centre was depressing. What does surprise me is that Luton is not on the list! When we lived there, people called Stevenage and Luton the 'armpits of England'.

Had we not been in such a hurry, we would have discovered some of the much nicer places to live.

Steve

I'd guess people in Luton imagine Stevenage as the sunny uplands.

John

Quite surprised to see Malvern Hills in there at 17.

My perception is this is a posh and beautiful part of the country but, I admit I've not actually spent much time there. Just driven through many times.

Mike4 wrote:Quite surprised to see Malvern Hills in there at 17.

My perception is this is a posh and beautiful part of the country but, I admit I've not actually spent much time there. Just driven through many times.

Without the context behind why it was voted 17th worst place etc, Id agree with the surprise. We visited just a few weeks ago for a weekend. Very pleasant little town,

Certainly WAY better than my home town, which doesn't even feature in that list, which is just the proverbial sh1th0le.