‘How can I help one of my grandchildren buy a house without making the others jealous?'

Telegraph

24-05-2025

Dear Sam,
I want to help my granddaughter buy a house. She is in the police force, and is currently living in subsidised shared accommodation because it is too far for her to commute from home.
My financial adviser told me that I can afford to be generous with my family over the remainder of my life without running out of money. I even have a significant 'just in case' pot which would pay for care at home if I preferred that to selling the house and going residential. I feel very well provided for.
My granddaughter has found a place in Kent that makes the commute tolerable. If she can get a 20pc deposit organised, she can raise a mortgage for the rest. She has saved some, but needs another £25,000 to be sure she can cover the deposit and costs of buying her first home.
I can easily afford to give her this, but I do have two other grandchildren. They are younger, and not ready for homeownership.
I have two dilemmas. Firstly, is there a way I can treat them all equally? I don't know when the other two will buy homes, but the prices will be different, so I will probably need to give them more to achieve the same result.
The second dilemma is that I would want them to use the money to become homeowners. I am a strong believer in getting on the property ladder and securing their housing position, but I don't want them to end up with boyfriend/girlfriend who benefits from my money if they buy something together and then have a bust up.
How can I make sure I can help them all, encourage them to buy homes and ensure what I give my grandchildren can't be claimed by anyone else?
– Margaret
Dear Margaret,
I know your financial adviser, which is how you were encouraged to write in with your dilemma – and it doesn't surprise me that because of good planning and well-managed personal finances, you find you have the means, and the heart, to support your family in a deeply meaningful way.
Your granddaughter's determination, joining the police force and saving diligently, is also admirable. It's no wonder you feel moved to help her take that next step on to the property ladder. Your instincts are generous and wise, but I can see why you're feeling torn.
The first of your concerns – fairness – is one many grandparents share. You want to help now, but without disadvantaging your other grandchildren later.
The truth is, equality doesn't always mean sameness. Property prices will change, your grandchildren's lives will unfold at different paces, and needs will vary. Rather than trying to make identical gifts at different moments in time, it might help to shift focus toward the principle of 'equitable intention', offering similar opportunities to each grandchild, even if the financial outlay isn't exactly equal.
To manage this, you could keep a simple record of gifts made, clearly noting the purpose and value. If you give £25,000 now to your eldest granddaughter, record it as such with the understanding that, when the time is right, the younger grandchildren will receive a comparable leg-up, whether for property, education, or another major life goal.
If circumstances change, you'll still have the flexibility to adjust accordingly. Keeping a note like this in your will or letter of wishes (which is not legally binding, but can guide your executors) helps communicate your values and intentions without tying your hands or forcing premature decisions.
The second dilemma – protecting the gift from partners or relationship breakdowns – is trickier, but it can be approached sensibly.
If you were to gift the money outright and your granddaughter buys jointly with a partner, that partner could acquire a beneficial interest in the property, especially if they contribute financially or live there long-term. If the relationship were to end, your gifted money could be caught up in a dispute or division.
One way to reduce the risk of this outcome is to give the money on the understanding that it will be documented as a loan, even if it is never repaid. A formal declaration of trust or a loan agreement can establish your granddaughter as the sole legal owner of the money, protecting it in the event of a relationship breakdown.
This approach gives her full use of the money but creates a legal separation from her partner's financial rights. It also preserves some flexibility, allowing you to later forgive the loan if the circumstances still feel right, for example, once she's married or well-established.
However, there's a trade-off here that your financial adviser may already have highlighted. From an inheritance tax perspective, gifts rather than loans, begin the clock on the seven-year rule. Provided you survive for seven years after making the gift, the amount falls outside your estate for tax purposes.
Loans, by contrast, remain assets on your balance sheet and are counted in full, even if they are never repaid. So, if reducing a future inheritance tax bill is one of your objectives, a straightforward gift may be the more efficient route. Just be sure to keep good records and be open with your adviser about your intentions. As advisers we can be inclined to overweight the tax outcome in a decision-making process – forgive us.
Some grandparents prefer to buy a stake in the property as a way of protecting their contribution, but you've indicated that this doesn't appeal. That's entirely understandable. Another alternative is to place the money in a trust, but this can be complex and costly to manage, and is rarely necessary for modest sums.
Ultimately, the path forward may involve a combination of open communication and light-touch legal planning. Speak with your granddaughter, she will likely understand your desire to help all the grandchildren equally and to protect your gift from risk.
Working with a solicitor to draw up a simple loan agreement or deed of trust can keep things clear, fair, and future-proofed without casting any doubt over your generosity.
Your instincts to support your granddaughter now, to avoid unintentional unfairness later, and to encourage home ownership as a foundation for a secure life are deeply thoughtful. With some careful structuring and honest conversation, you can honour those instincts and give your granddaughter a wonderful start, while keeping options open for your other grandchildren too.
Warm wishes,
– Sam