Advice needed

dmurray0

My wife's grandmother has been renting for 47 years from the council and feels it may be better to buy the flat she is in rather than paying the rent. She obviously cannot get a mortgage (early 70's) and we have been thinking of buying it for her and renting it back to her. The flat would be in her name to get the discount but we would be lending her the money. If we haven't got the desired amount, could we get a loan rather than a second mortgage and what things should be looking for/be wary of?

Robert_Sterling_3

OK
You lend your wifes grandmother some money to buy her council owned flat.
Your grandmother buys the flat.
Your grandmother owns the flat.
So she cannot pay you rent for it because it is her flat.
So each month she repays you some of the money you loaned to her.
This is even better than getting rent as rent would be taxable and the return of your own money will not be taxable.
This leaves you with the problem how can you get the money you need to lend to her in the first place.
It can't be a loan secured on her flat as she is overage and in any case it is you who needs to borrow the money.
At this point I will bow out having asked more questions than I have answered and await further replies to your interesting question.

Hawksmuir

dmurray0 wrote:

My wife's grandmother has been renting for 47 years from the council and feels it may be better to buy the flat she is in rather than paying the rent. She obviously cannot get a mortgage (early 70's) and we have been thinking of buying it for her and renting it back to her. The flat would be in her name to get the discount but we would be lending her the money. If we haven't got the desired amount, could we get a loan rather than a second mortgage and what things should be looking for/be wary of?

First thing is talk to the council and find out how much they want for the flat/house, then think about raising the capital.

But make sure if you are doing this you get either the money back from granny, or you get the flat/house in the will.

My mum did the same for my gran and she gets 50% of the house from my grans will.

tightgit_2

What about if the Grandmother has to go into a nursing home. She would have to sell the property to pay the nursing home fees which could be £500 plus a week.

GDB2222

A word of warning. I have a number of ex-local authority flats that I rent out. The council has just issued estimates for updating the windows and external decorations amounting to £8,000 per flat. This is in addition to the normal service charges. All councils have until 2010 to bring flats up to a standard regarding insulation and so on. It would certainly be worth checking with the Council whether they have any works planned. IIRC you have some protection on a RTB for a few years after purchase, but it would be a shame to find that the council carries out expensive work just after the protection ends.

Poppy9

Beware!!!

My OH and his sister did this - see my previous post.

To date still no change, MIL owns house in full (FIL has passed). If she has a hissy fit and decides to will it to the dogs home then that's her right. Also as another person mentioned any sort of residential care needed she will have to sell her home to pay for.

As people age they can get awkward - I think I will when I get old;)