How can I help my children buy their homes now?

Q I am a widow, aged 54, living in my home (worth about ?500,000) and have no mortgage.

I also have a half-share in a small office building which when fully let, brings in ?30,000 per year, half of which is mine. I have a good salary as a headteacher, but plan to stop working in the next two years. And I have ?12,000 in cash Isas.

I would like to know how best to help my three sons, all who are finding it impossible to buy their first home due to low salaries and student debts. Ideally, I would like to be able to offer them ?20,000 each, perhaps as a house deposit, to get started.

I don't want to sell my house, to which I am very attached and which has been a great comfort to me since my husband died unexpectedly a little while ago. I will need the income from the office building to supplement my teacher's pension when I stop working, as I have only had about 24 years of service and will lose a lot by retiring early.

If I increased the small mortgage on the office building, my late husband's business partner (who owns the other half) is liable for my debts. Only half the office building is let at present and is taking some time to attract further tenants, so is not producing full rental income.

So while on paper I seem to be very well off, I can't see how to raise ?60,000 without compromising my future income. Bearing in mind that I may only have my good salary for a little longer, is there some way I should be using my income status to raise money to help my family?

WH

A Looking at your situation, it seems to me that your best chance of obtaining large amounts of cash for your sons, would be to consider an equity release scheme on your home. You are far too young to "sell" your house in advance. However you could raise a mortgage that would be repayable on your death with the interest being rolled up in the meantime.

You must be careful because interest can compound at an alarming rate over the years and take a large slice out of the residual value of your house. However house prices over a longer period tend to rise in line with interest rates and your inheritance tax liability would be reduced.

This type of scheme had a very bad name some years ago, but since then the providers have got together to clean up their act through an association called Safe Home Income Plans (Ship). With house prices rising so much, the plans have become increasingly popular as a means of raising money on an under-used asset.

Age Concern, which helps people over 50, publishes a very good factsheet - snappily entitled "Raising income or capital on your home".

This outlines the options available in a very clear manner. They also have a special helpline number - 0800 00 9966.