Should I step in and help my child buy a house?

With so many young families struggling to save for a deposit for a house, it’s becoming increasingly common for parents to provide loans from the ‘bank of mum and dad’.

While it may seem like a good solution to get them on the first rung of the property ladder, or into a home they may not have been able to afford, it can also be a minefield should they divorce or separate.

Parents enter into these types of loans assuming that because it is going to a family member it will be paid back at a later date, often dipping into life savings and with no formal agreement in place.

If the worst should happen, and their child divorces their spouse, that spouse could make a claim against that cash, or even any assets bought with it.

At Harrison Drury we are seeing an increase in the number of cases where parents are then faced with extremely complicated proceedings to try and get their money back.

These proceedings can prove very expensive, and could result in no money being recovered.

It is vital that any parent considering opening the bank of mum and dad should first seek legal advice to ensure that any loan made is protected, either for themselves or for their child in the event of a divorce.

If you are interested in finding out more on this, or any other aspect of family law, contact Damian Baron at Harrison Drury on 01772 258321.