First-time buyer help from parents 10 tips for parents helping first-time buyers

Consider the issues carefully before helping your child become a first-time buyer

• Do your research: It’s always best to do some background reading on the subject of buying a home. Also visit our guides to tax on property and inheritance tax for information on your potential tax liabilities.
• Be clear: You need to make your child aware whether you are making a gift, a loan (with or without interest) or an investment.
• Think of your child: Use your knowledge of your child and their circumstances to establish the best way to help them, such as with a guarantor mortgage or by remortgaging. Encourage an open dialogue with your child so they come to you if they get into difficulties.
• Go legal: See a solicitor and get a legally binding agreement drawn up. To safeguard a loan or investment, make sure it stipulates the nature of any arrangement.
• Sale control: Even with a legal agreement in place, there’s a chance your child could sell the property without your consent. To avoid this happening, complete Land Registry form RX1.
• Share ownership: Try to ensure that you are named on the deeds. If you do take on a stake in the property, don’t forget to update your will to reflect what you’d like to happen to that stake upon your death.
• Don't barge in: Respect your child's right to privacy and don't dictate who can and can't visit your child's home.
• Be honest: Don't exaggerate your income to secure a larger mortgage.
• Don't take things for granted: You shouldn't rely on your current good relationship with your child – things can go wrong.
• Think of yourself: Don't put yourself in a financially risky predicament by overextending yourself and don't assume that mortgage interest rates will remain at the same level.

Getting external advice

We believe you should take independent advice before choosing a mortgage. The Which? Group offers an independent mortgage advice service that looks at every mortgage from every available lender. You can also find an independent mortgage adviser using the Unbiased website.

If you're looking to find out what your repayments would be at different interest rates, or want to get an idea of how much you could borrow, try using the mortgage calculators offered by Which? Mortgage Advisers.