The role of parenting is very much the same as it has always been. Providing our kids the love, protection and worldly wits for their own journey. However, one thing really has changed and that is property prices.
The Cost of Bricks & Mortar
It is hard to believe how much house prices have gone up in our lifetimes and the last two years have been particularly affluent for us all. Our first homes are very much now a pipedream for our kids, and this is only getting worse.
I spoke to a friend recently who had been saving £1,200 per month while living at home. She looked at a flat before the pandemic and she could hardly afford the cheapest in her area. She put in an offer but was soon outbid by an investor adding to their portfolio and she gave up, with the plan to try again next year with another £15,000 in savings to work with.
She started looking again recently and a flat in the same building as the last one, with the same layout, is now listed as £20,000 more expensive than when she originally looked. How can someone save so much of their salary for a year and yet be no better off? Worse even, she went to put an offer in, and they had just received an offer for £10,000 more than the asking price and were considering whether to hold out for more.
What Can You do?
Let’s assume that this is probably going to continue as there is just so little supply of properties.
While the thought of your children living at home forever might be nice to some, I and others are not so keen. I want my kids to fly the nest and live their lives while also giving me and their mother some space for ourselves.
So, we started putting some money away each year for the kids, with the thought that one day, they will need some help with a house deposit, rather than waiting around for me and the Mrs to die.
The only way to make sure that this money is keeping up with inflation and those housing prices, is to have it invested, so we set up a little portfolio for each of them that will help grow that deposit to something worth so much more to them than anything we could spend it on. While setting them up for life, with the added benefit of less washing up.
Want to know how to do this? Give us a Call here.
We are independent Financial Planners, and our job is to help you plan for your kids futures as much as we do our own.
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The value of units can fall as well as rise, and you may not get back all of your original investment.
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