Buying parents council house

lynzpower

I dont understand what you mean here

I have enough savings to cover the mortgage and the mother will be paying less rent than she is now.

Do you mean that you are wanting to pay cash for the property ie no mortgage?

Or you will need a mortgage for it?


lisyloo makes excellent points

wigglygiggly

Oh, and another thing. Here, the council also has first refusal to buy it from you after the 5 years are up. I agree though that what is in it for you. Wouldn't it be better off as a council home if your Mum is going to end up paying rent anyway? Also, if you end up in financial difficulty your Mum could be homeless too.

margaretclare

If she's paying a higher rent now than you plan to charge her, is there any reason why she can't buy it herself on a normal mortgage? You said she's still working (I think)? Some mortgage lenders insist on a mortgage being paid off before age 65 but not all do. Some are willing to lend to older people. She'd probably achieve the desired result (for her) of paying less on a mortgage and thereby having more disposable income. Of course, she then becomes liable for all repairs and redecorations which at present are the responsibility of the council. The first thing most new owners of ex-council houses seem to do is to change all the doors and windows!!

Margaret

lynzpower

good point wiggly- bear in mind if MIL needs for whatever reason to go onto housing benefit - her health may deteriorate if shes older etc and I believe housing benefit cant be paid to close family members- anyone clarify this?

lynzpower

margaretclare wrote:

If she's paying a higher rent now than you plan to charge her, is there any reason why she can't buy it herself on a normal mortgage? You said she's still working (I think)? Some mortgage lenders insist on a mortgage being paid off before age 65 but not all do. Some are willing to lend to older people. She'd probably achieve the desired result (for her) of paying less on a mortgage and thereby having more disposable income. Of course, she then becomes liable for all repairs and redecorations which at present are the responsibility of the council. The first thing most new owners of ex-council houses seem to do is to change all the doors and windows!!

Margaret

Excellent point Aunty M

Additionally when buying local authority property, theres usually some quite whopping service charge issues- ie if the vcouncil says we need a new roof/ everyone is having new windows etc , everyone who owns has to pay, if you rent from the council you dont.

Again clarification from those whove been hit by these monster charges most welcome for my learning

lisyloo

Also, if you end up in financial difficulty your Mum could be homeless too.

She is at risk from your death, sickness, accident or redundancy (possibly divorce or preganancy) i.e. any circumstance that means you can't meet the mortgage payments.

You could change your will and get insurance for some of these things (which will all cost money).
I don't think you can get insurance against every though e.g. unplanned pregnancy (for a bloke this means extra outgoings via the CSA).

IMO it's all too complicated.

Acc72

Although this might make you a few quid when the tennant eventually moves out or dies, it leaves the tennant in a very precarious position and if I was her I would not agree to it.

What guarantee has she got that you :

- will not increase her rent at a future date
- Will not force her to leave the property
- will pay for all ongoing maintenance and repairs on the property


For all she knows, you might fall out with her daughter and either evict her from her home or double her rent and leave her with damp and no heating !

a010454

I have boughtmy aunts house in Scotland. They will not now let you buy 100% in your name but 99% can be in your name thereby you are safe and she is also safe cos you cant throw her out.

Mrs_pbradley936

Separate the moral and the legal issues and deal with them one at a time. Legally it can be done with you being her source of funds rather than a bank or building society. That means you would have a charge on the property but have to pay tax on the income you are receiving from her. Then mother would be in the same situation as if she had bought it herself.

As for the morals well they will be different for all of us.

devils_advocate

If you're getting her to buy it with the discount, but effectively going into a side agreement to buy it from her now at a discount to the market value, and not telling the council, there's one word to summarise the legal position - fraud!!