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Children buying with their parents

ended 25. May 2023

A Newspage broker says she has seen a rise in the number of families - adult children, parents and sometimes grandparents - buying homes together as it means they can buy a bigger property to spread out and at the same time reduce their outgoings, crucial amid the cost of living crisis. She said this trend was also partly due to Covid, which saw a lot of families spend a lot of time apart. When Covid ended they either moved closer to one another or in with each other. UK newswire, Newspage, asked brokers if they have seen similar evidence of this trend. Their views can be found below.

10 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
The pooling of family resources to buy a larger property for everyone has definitely become more popular. Properties with multiple buildings, annexes and additional bedrooms are obviously not as plentiful to buy, but many of the £1m plus enquiries are as a direct result of this trend. It does raise some concerns though. All is fine whilst everyone is getting on within the family, but what happens if there is a family feud or fallout? What if some of the family live together, but not everyone? Who would inherit what within the estate? Would the younger family members have no option but to sell their home in that situation? Also, these property types are not for every lender, so it is imperative to get full sales particulars to assess lender policy and check the deeds for any restrictions, too.
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Clive Read
Owner at Goldmanread
I recently had a case of where three generations from one family moved in together. The property was purchased in the names of the parents, who were in their 50s. The wife was retired. The wife's mother was selling her house and using part of the proceeds from that to assist with the deposit, with the remainder to subsidise her income/savings. This enabled the family to buy a much bigger property for them all to live in, with a separate annexe for the grandmother. At the other end of the family was the couple's daughter who was married with two young children. She was able to continue working as her mother was able to take over some of the childcare responsibilities, which would have effectively meant that the daughter would have been unable to return to work. The main driver behind this arrangement was the cost of living crisis rather than Covid. There are now five people helping with the mortgage and bills. They are a close family and the arrangement suited them all perfectly.
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Christian Duncan
Managing Director at Manchester Mortgage Centre
Amid the cost of living crisis, we have seen a growing number of people looking to merge their family homes, with the sole objective being to save money. With the increased cost of living, people on low household incomes are feeling the pinch. Mortgage interest rates have also increased, which, in turn has affected the amount of rent landlords need to charge. We are also seeing some people looking to do this to help mitigate IHT by selling up and putting their money into homes with their children. Another huge advantage of living with family members can often be having family members on hand to help reduce childcare costs. We have recently helped a young family of four in Wales secure a mortgage with bad credit who took the decision, during Covid, to move back in with their parents to allow them to save a 5% deposit. This has enabled them to finally achieve home ownership.
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Rita Kohli
Managing Director at The Mortgage Stop
We recently helped a family in this very situation. The adult children wanted to buy a bigger house for a growing family, and they owned a smaller property on the south coast. The parents owned a larger house and wanted to downsize. The kids couldn't afford a larger property on their own and the parents didn't want to be as far from their grandchildren so they both sold their respective properties and were fortunate enough to find a property with a large house plus a reasonably size annexe they could purchase together with the larger deposit. This is just one example but we have helped a couple of clients in similar situations and spoken to some more over the past year who then felt it wasn't right for them or just couldn't find the right property. I don't think this will work for everyone, as money can split families as well so you need to think carefully about it before committing to it and people need to have an honest conversation about what happens if things don't work out.
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Craig Fish
Director at Lodestone Mortgages
I have been arranging mortgages on this basis for many years. Typically it occurs in certain cultures, primarily Asian. It generally starts when a son gets married, his wife will move into the family home. Not long after we find ourselves arranging a new residential mortgage on a much bigger home in the children's names with one if not both of the parents added for affordability reasons. We have also arranged mortgages like this on previous council homes, using the right-to-buy scheme. This is a great idea, especially if as a family you are close, but it doesn't work for everyone, as a lack of privacy is one of the costs. If anyone is considering this, I strongly suggest they give it some very serious consideration, and sit down with the family to discuss it before taking the plunge.
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Imran Hussain
Director at Harmony Financial Services
There has been a huge uptick in clients, looking to purchase with the parents, especially with schemes such as joint borrower sole proprietor in parts of the country where property prices have rapidly increased we have always had enquiries from clients were getting large sums gifted to them from parents and grandparents by forwarding inheritance to see the children and grandchildren enjoy it whilst they are around and until actual affordable housing is built ,This will likely continue.
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Jonathan Burridge
Founding Adviser at We Are Money
Multigenerational homes are commonplace in many cultures. I have arranged a good number of mortgages for households on this basis, mainly for Southern Asian origin families. There are great benefits for a family unit to occupy on this basis, such as child or elderly dependent care, economic savings and of course a greater sense of family and community. Of course, it does require greater tolerance from all parties and some loss of privacy, but it can work.
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Amit Patel
Adviser at Trinity Finance
Asian families tend to live together as a "joint family" because it increases the family bond between different generations and strengthens family ties. We have a saying “Family that eats together, prays together, plays together, stays together”. It also reduces significantly the overheads associated with running the property; mortgage, council tax, utilities etc. Our faith teaches us to serve our parents later on in their life similar to the way they looked after us when we were growing up.
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
There's an emerging trend where families are opting to buy homes together. It means they can buy larger properties whilst reducing individual expenses. A couple of our clients have embraced this setup, looking for joint homeownership for two reasons. Firstly, combining their resources increased their mortgage affordability, so they could get a bigger home. And secondly, it really helped with their childcare needs. By living together, they created a supportive environment where family members could share responsibilities and enjoy the advantages of having a good-sized property. For some, it works. Providing an innovative solution to the challenges of mounting living costs. While not yet a widespread phenomenon, it shows how some families are adapting to the current economic conditions, by working together to maintain a good lifestyle.
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Adam Smith
Founder at Alfa Mortgages
While we haven't personally encountered such a scenario, it's plausible that some people's preferences may differ. Personally, the idea of purchasing a house alongside my parents is something I find unappealing. While I have immense love and affection for them, I believe that having a certain degree of personal space can foster stronger and healthier relationships.