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Don’t trip up when helping children on to the property ladder

The Law Society is urging parents to be wary when helping their children on to the property ladder.

It fears that serious family divisions could erupt if things go wrong.

The Society says the strict mortgage regime brought about by the economic downturn means that many young people are relying on their parents to help them get on to the housing ladder.

This can quickly lead to problems, however, if there is no clear understanding of how a loan should be paid back.

The President of the Law Society, Robert Heslett, said: "If parents are helping their children, they should see a solicitor beforehand in order to draw up a loan agreement.

"It is very important that all parties involved are comfortable with the arrangement and that everyone knows where they stand with regards to paying back the money. While it’s unlikely your children will run off with your savings, handing over a large amount with no legal structure in place is a minefield. It could tear families apart if things went wrong."

The Society stresses that parents should seek legal advice to protect their interests before handing over their life savings.

"A solicitor will also talk through all the options available, and provide alternatives, such as parents acting as loan guarantors or entering into a joint ownership agreement.

"Solicitors are trained experts and are highly experienced in navigating the maze of paper work and dealing with house purchases. Not only will a solicitor offer the best advice and service, they will help to avoid some unforeseen hazards that may occur down the line."

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