Are you a parent who wants to help your son or daughter on the first rung of the property ladder?
Houses these days are expensive and many wonder how their children afford to purchase their first home. Many parents may wish to consider helping their children get a first foot on the property ladder, but will wish to do so whilst trying to ensure they do so without too much of a financial risk to themselves.
Other than making an out and out gift to your child, you could consider:-
- Lending money to your child, but having the moneys loaned secured by a second charge over the property. Provided that the equity in the property does not go down, you should then have your investment in the property secured and this would provide a certain amount of protection in the unlikely event of the property being repossessed. When the property is sold in the future, it would ensure (again provided that there is sufficient equity in the property) that your money is returned to you and if the charge has been drafted to provide for it that you receive the increase in any rise in property prices. Here, your money should be returned to you upon the sale of the property and could be useful if lending moneys to a son or daughter and their new partner. The charge can provide for you having a percentage interest in the property, a fixed sum or a fixed sum plus agreed interest.
- You can purchase a property jointly with your son or daughter, but in this case, if a mortgage is taken out, you will need to go on the mortgage. The property will then be held in your joint names and we recommend subject to a Declaration of Trust.
In both cases, we are able to offer expert advice and where necessary, can draft the necessary documentation. We will consider your individual needs and advise what we consider to be the best for your particular circumstances.
Please contact any member of our conveyancing department for further information.
