Buying parents house

auntyvon

Hi - Could anyone give me some advice or highlight things I should be taking into consideration with the following:

My parents house is worth about £150k. I'm single and earn £30k per annum and want to buy a house. I currently live with mum and dad. Mum and dad are both retired (both aged 57) and becoming worried their savings won't last very long.

Could I buy their house? With them gifting me the deposit of £30/40k. They would then keep the remainder money (probably giving my two siblings the same amount i have received in the deposit to help them get on the housing ladder too). Parents would continue to live with me, not paying rent.

Enables me to buy a house, hopefully being eligible for a mortgage of £120k and gives them more savings. I'll commit to them living with me until they die or need specialist care (which will by that time probably have to be state funded but we're hopefully talking 20-30 years away).

Is this a plausible plan?

lincroft1710

Out of several reasons why I don't think this is feasible/good idea, I'll just pick one.

What happens if you find someone you want to spend the rest of your life with? Will that person be happy to live with you and your parents?

antenna

I dont thnk they can gift you more than around a thousand pounds,maybe even less

CloudCuckooLand

If you give them £120k for a £150k house, and then they give £30k each to your siblings, they will have disposed of £90k worth of assets. This will be an issue if a parent(s) requires care, under council 'deprivation of asset' rules.

Them being left with £60k isn't exactly a massive amount of money to last what might be 30+ years...

A decent solicitor would not allow your parents to sign away their right to residence, which means they would need to be on the deeds in some fashion, which would be a problem for many Lenders...

Mojisola

There might be good reasons why they have retired so early but, if not, couldn't they consider part-time work? As you say, they probably have 20-30 years of active life ahead of them.

auntyvon

Yes, £60k is not much to live on. But its more than they have at present. Plus they'll be factoring in about £50k inheritence from Dad's mum. That along with their pensions should be ample to live on - we've never been a high income family!

Have thought about what happens if I meet someone but quite frankly that's a 'what if' problem that shouldn't take precedence over what the actual problem and potential benefits of the present situation. For me, family comes first and any new partner would just have to accept that, ie would have to accomodate living with mum and dad or take responsibility with me for giving them back a place to live. But anyhow, I don't anticipate being with anyone.

The potential benefits are that it helps me and my brother onto the property ladder and secures my parents to live in their house potentially for the rest of my life as I will live with them and be able to care and manitain their independence for longer.

I thought this kind of arrangement wasn't an issue for local authoritites unless it had taken place less than 7 years before either parent required care?

clutton_2

have they looked at equity release ?

jockosjungle

Maybe you need to think about this, what you have just said...

They're just inheriting from your Grandmother and they are 57. To be their child I am guessing you must be somewhat younger than 57, I'm guessing in your 30's.

Taking this as a guide and that people live longer, chances are they will live until you are approaching retirement yourself. Do you really want to live with your parents your whole working life? What happens if you want to get married and have children? Are you going to kick them out?

The 7 year rule is for Inheritance tax purposes, I am not sure about any others.

Also the whole scheme seems fundamentally flawed, you talk about your parents being hard up for cash and needing some money but the major motivation here seems to be you and your brother each receiving £30k each.

Can they really not hold out for a few years until the state pension kicks in, if they're due £50k surely that'll last them until at least your Mother gets her pension

R

mark5

What if you fail to keep up the mortgage payments?

I can see the plus points for you and your brother but only negatives for your parents.

I dont understand how ppl retire so early when they are not in a financial position to do so.

Linton

auntyvon wrote: »

...

Could I buy their house? With them gifting me the deposit of £30/40k. They would then keep the remainder money (probably giving my two siblings the same amount i have received in the deposit to help them get on the housing ladder too). Parents would continue to live with me, not paying rent.

Enables me to buy a house, hopefully being eligible for a mortgage of £120k and gives them more savings. I'll commit to them living with me until they die or need specialist care (which will by that time probably have to be state funded but we're hopefully talking 20-30 years away).

Is this a plausible plan?

A great plan for you - madness for them. What happens if.....

1) You want/need to move
2) You and they fall out
3) You go bankrupt
etc etc

Anything goes wrong they lose their home.

Also, them not paying rent will cause problems should they need council funding - AIUI the council can take the view that they havent really and fully sold the house to you.

Anyway, if they do need care in the future why shouldnt they have the extra comforts that selling their home would give them?