Behind the headlines: I can’t help my children to buy a house
With one in four home buyers still receiving financial help from parents, Marion Mcgilvary reveals why her children aren’t among them
Sad but true: none of my four children will be able to buy a place of their own in London. When I mentioned this to one of my colleagues the other day, she looked aghast, ‘But can’t you help?’ I almost choked on my coffee.
It’s not that I don’t want to help my children climb on the property ladder, or that I wouldn’t saw off both arms for them, if me being armless would provide them with a home of their own. It’s simply that I just can’t afford it.
This branch of the Bank of Mum and Dad has collapsed due to insufficient funds. It’s not open for business for more than the smallest unrepaid loans.
It feels very selfish not to be able to give them a leg-up, especially as everyone else seems to be doing it. I have other friends with fewer children and steady marriages who can do just that – and I admit I’m envious.
Tough times
Figures out earlier this year show the Bank of Mum and Dad will have doled out more than £5.7bn to children in 2018 and are now the 12th biggest mortgage lenders in Britain.
But, as a 60-year-old divorcee nearing retirement, I’m just as worried about where I’m going to live, as where my kids will end up. My youngest child, 26, still lives at home and can’t afford to move out. Who wants to still be housesharing in their 30s? I had a mortgage and four kids by then.
If I could have stayed happily hitched it might all have been so different. The mortgage on the house we bought in west London all those years ago is finally paid off, and the house is for sale. Its value has increased dramatically. It’s on the market for £750,000. In another era we would have been swanning around in a pink Cadillac, drinking Champagne. If all had been well in the marriage of Mum and Dad, this is the moment we might have been able to dole something out to the kids, both to avoid death duties, and give them a bit towards a deposit. But instead, the proceeds are being divided with the ex-husband; we both get half – which is a nice sum if you want to live in rural France, but not so great if you want to be within commuting distance of London – and split any surplus four ways.
It certainly doesn’t leave anything over to ‘buy’ myself a grandchild by providing some cash for a two-bedroom flat.
My guilt is compounded by the fact that I benefitted greatly from the Bank of Mum and Dad myself. My parents were sound working-class people of slender means, who nevertheless saved throughout their lives and were able to help me often with money – to buy my first and third car, and leave me a small nest egg, which gave me a boost at a time in my life when I needed it.
‘it feels selfish not to be able to give them a leg-up’
As a result, I’ve been financially independent most of my life. I left home and moved to Oxford at 17, where I worked as a librarian. I lived in a succession of grotty bedsits with no heat and shared houses with one-bar electric fires, powered by meters I was too poor to feed. I could have moved back to Scotland, but it was too
late to go back to rural West Lothian – my life had changed.
As a girl, all I wanted was a place to call my own, so that’s something I wish for my children, too. In the end I got the two-uptwo-down, but through no effort of my own. My husband’s parents gave us the deposit – a generous third of its value.
However, that was 35 years ago. I could no more come up with the equivalent today than run for President and beat Donald Trump. Property prices are just plain bonkers in most metropolitan areas, with London leading the madness – the average deposit on a starter home is now £114,952. That’s all my retirement money.
Ridiculous rents
‘How did you even manage to save?’ asked my 29-year-old son incredulously the other day. He and his wife both have MAS and work hard for charities, but earn modest sums. Like many young graduates these days, most of their joint salary goes in rent for a bijou residence in north-west London.
I’m not sure how I ended up in this position. I’ve put away my pennies as instructed by my Presbyterian parents and have managed to pass on the theory of saving for a rainy day, but living in London, I can’t see a way for them to put it into practice.
Feeling the pinch
Meanwhile, though I have savings, after years of child-rearing, housewifery, part-time and freelance jobs, no pension and nothing from the State until I’m 68 (so another eight years to go), what little I’ve got in the bank is all that keeps me from the fear of having to eat cat food in my old age – or at least a lot of Tesco Economy Baked Beans.
OK I’m slightly exaggerating. I’ve made what sensible precautions I can on my limited income. I just have to ensure I don’t live too long.
I have had a comfortable and privileged life. As have my children. But, even with this, I don’t have much surplus to give the same helping hand to them that I had from my parents.
For many of my peers with grown-up kids, the Bank of Mum and Dad just doesn’t have the same sort of funds at its disposal as is generally assumed.
My father had the strong conviction that he didn’t want any of us to wait till he was dead before we got any money. He wanted to give us financial help when we needed it. I’d like to do the same, but beyond the odd takeaway and lump sum in times of difficulty, my purse strings are tied. I inherited my parents’ thrift and a fear of debt. My mother wouldn’t buy on HP, or even from mail-order catalogues. As a result, I’m the only person I know who doesn’t use a credit card. And my children can stretch a pound till it squeals, and know how to live well for not very much, but they are still in debt, saddled with student loans as are most of their friends.
The only sort of financial advice I’d give to my kids is, ‘Get out of town’, which is what I intend to do myself when I retire. Of course, if I did buy the farmhouse in France, they could all live with me. They love me, yes, but possibly not that much.
‘Property prices are just plain bonkers’