Legal advice from Tim Jordan, a partner in residential property conveyancing, based at FDR Law’s office in Stockton Heath.
Parents support first time buyers.
Q: My wife and I are planning to help our son buy his first home by paying a deposit of £50,000. I have been advised that we need to find our own solicitor to look after our interests. Is this really necessary?
A: You are certainly not alone in wanting to help your adult child take that first step onto the property ladder.
Many young people today are struggling to buy their own homes. Rising house prices and the need to find bigger deposits mean the prospect of being forced to rent for life is all too real.
A recent survey commissioned by the housing charity Shelter showed that almost half of those questioned believe their children will not be in a position to buy a property without their help.
It has become increasingly common for parents to step into the breach – often making major sacrifices to assist their children.
But astonishingly many fail to seek any legal advice before putting forward often substantial sums of money.
When helping out family members it may feel intuitively wrong to put financial matters on a legal footing – but failing to do this could turn out to be a very costly mistake in the future.
In your own case - unless the money is a gift with no expectation that it will ever be returned - it is important for you and your wife to seek independent legal representation in order to protect your own interests.
As much as we all trust our own children circumstances can change in totally unforeseen ways such as marriage breakdown, death or redundancy.
Parents in your position may need a trust deed or a loan agreement – and you should seek separate professional advice so that there is no conflict of interest. That way you can help your son to achieve his dream without risking your own financial security.