Advice on how to help children buy a 1st property.

[Purple]

The housing market is not operating normally. Surely there is nothing wrong with helping them out in such a case?
Obviously, I have to help them out so I'm not at (too much) of a disadvantage. With this plan, I would help them out, and also end up with a granny flat to use for aged parents, or short term lets. So win-win.

I'd be thinking about downsizing in the future in order to give them money rather than building a Granny flat. The downsides have been articulated above. If you now have a house that is suitable for 4 people you don't need the same space when they move out. I agree with your sentiment on helping your children out.