Worried about where your children are going to live?

Worried about where your children are going to live?  You should be.

The average house price in the UK is around £300,000, with average first time buyer house price at around £200,000. https://www.theguardian.com/business/2016/may/16/average-asking-price-first-time-buyer-home-buy-to-let-stamp-duty

If a prospective first time buyer has raised the £20,000 deposit, then taking into account costs they will need an income of around £39000 a year to be offered a mortgage.  And they will be charged around 4% for the privilege. http://www.halifax.co.uk/mortgages/mortgage-calculator/calculator/#

Only the top 20% of earners in the country have that level of income.   http://www.salarygraph.co.uk/

So, if your children want a home of their own, then without help they will need to be in the top 20% of wage earners.

How can you help as a parent?  Here’s one example.  If you own your home and have paid off your mortgage already then you could take out a mortgage on your home at a much better rate, and then lend the money to your children.  Suppose your home is the average value, then you would need to borrow just under 65% of the value.  An offset mortgage with the Coventry for instance offers a rate of under 2% (lower because of the better loan to value ratio) http://www.coventrybuildingsociety.co.uk/mortgages/AccountSummary.aspx?socseqno=1&prodCode=OFL50&Company=1  Taking out an offset mortgage on your own house also means that you can set up the mortgage before your children need the money to buy a home.   So even if they are some years away from wanting to buy, you can still be putting arrangements in place.

But you could make good use of the funds in the meantime. Why not do something immediately to help others who are desperately in need of homes?  Think about the suggestion in this article: https://www.churchtimes.co.uk/articles/2016/29-april/comment/opinion/use-what-power-you-have-to-help-the-poor .  Or if you want even lower risk, then you could buy a house and lease it to your local council. http://www.independent.co.uk/arts-entertainment/let-your-home-to-the-council-paul-gosling-reports-on-a-tenant-who-could-prove-ideal-1535702.html

The housing situation is difficult, not just for our own children but for many others.  This is worrying, but I hope this short article shows that as individuals we are not helpless.  If you are in a position to help, then why not have a go?  It can be fun and rewarding.


About Minimalist Christian

Phil Hemsley is a graduate of the University of Cambridge, and a Fellow of the Institution of Mechanical Engineers in the UK. He works for a multinational company in the power industry, has presented technical papers at international conferences and holds many patents. He has published two books, the most recent is "The Big Picture, an Honest Examination of God Science and Purpose". He has lived on both sides of the faith fence. He is married, with two daughters.
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