My daughters richer than me.... !!!! Our property latest

November 17, 2014 by Rob Kahl

My daughters richer than me.... !!!! Our property latest

It is my daughter’s second birthday this week and she already has more money than me! We have set up a bank account for her, any birthday money she gets, plus some savings that I put in there every month are slowly building up to be a tidy sum. That’s aside as well from all of the pennies she seems to steal from me! As soon as I walk in the door she goes straight to my pockets to take out any change and put in her piggy bank, she is going to be shrewd, that one.

It is crazy to think that I am already thinking about how I can assist her with a deposit for her first home, first car, or hopefully University education. The reality is that the majority of first time buyers now receive some form of financial assistance from their parents. Whether this is in the form of cash for the deposit, guaranteeing mortgage payments or becoming joint mortgagees, with prices as high as they are and continuing to rise daily, it is hugely difficult to take that first step on to the property ladder alone.

Young people shouldn’t be obsessed with saving every penny they have to afford a deposit, they should be encouraged to go out and experience everything what life throws at them and live a little. Learn from the mistakes they make, I know I did!

Parents should perhaps not think of helping their children out now as a financial burden, but look at it as a long term investment in their own future. It is not only the young that may need assistance. Dare I say it, but no doubt later in life, us parent will need help paying for residential care and don’t forget it will be the children choosing the care home….pay back time!!!!???????

The choice, quality and cost of resident care differs greatly. Certain properties are just rooms in a shared care home with communal dining rooms, lounges and other facilities, others can be completely self contained apartments with just a care line to call in case of emergency. 

If you were looking to buy a retirement property then usually they have age restrictions but prices can vary from £75,000 for a 1 bedroom flat in Home Cove House in Westcliff to nearly £400,000 for a 2 bedroom apartment in Alston Court in Chalkwell. Beware though, these may not be the only costs, depending on the services provided by the developments regarding communal facilities, care services and on site staff the yearly management charges can be a shock. Some blocks can charge as much as £4,000 a year which can be a burden if not taken into consideration when on a limited pension.

The other option is to rent a property. Depending on your financial circumstances i.e savings, or if you own a property without a mortgage, then Council properties are available with assistance. So, if you were planning on leaving your property to your children and the council footing the bill for your residential care later in life then you may have to think again.

Council places in residential care homes are only available to those that need it most. Your financial circumstances will be taken in to consideration when applying for a place. If you have savings or equity in a property you are expected to use that up first before the government will even consider helping out and if you are already in a costly home they may insist that you move to somewhere cheaper.

There are some companies that will take your existing property, sell it for you and guarantee your place in the home until the inevitable happens. Taking the harsh view that you may not live that long and they could be quids in, ruthless I know, these businesses make an awful lot of money and know what they are doing, if you live until you are 120 then they will be severely out of pocket but they will take the view that they win some, lose some.  

The other alternative is that you use savings or sell your property, but if you have a pot of money that is not getting topped up, it may not last forever. With some care homes charging in excess of £1,000 a week how long will that nest egg you have worked so hard to save for last?

So, back to those children………. It may be, in the latter part of life you will need their help, so if you decided to go on that world cruise now rather than help them out with a deposit on their first property, you may find yourself put out to grass or shipped off to Switzerland.

Well that was cheery wasn’t it, blimey I have depressed myself with that one, let me try and think of something a bit more upbeat for next week!

One final thing…. Happy 2^nd Birthday to my little girl Matilda!

This Article is by Rob Kahl at Scott & Stapleton
To discuss your propoerty, please call Rob on 01702 471155