Unusual request from parents - FTB

Nashie83

Hi,

I'm 28 and have been saving for a house deposit for a few years and am now up to about £100k - I'm not quite ready to commit to buying a house as I am mainly staying in my hometown for my boyfriend (of 18 months) and would probably be living in London if not for him. Also, we are not yet living together, so would want to rent together first to check we are as suited as I think we are! In summary, I think buying a house is still some way off and I was happy with this as I can continue saving (target house is roughly £250k in this area, near London).

I've been back at home with my parents for a few years, but they have a park home about 120 miles away, on the coast, where they live most of the time (the park is closed Dec, Jan & Feb) but they come home maybe a couple of nights a fortnight. I pay rent, but probably about 50-60% market rate for a room in a shared house.

My dad presented me with his pension forecast tonight and is worried about his and my mum's futures. Neither work full time - he is 66 and semi-retired and she is 51 and receives disability for her MS (though she is still mobile currently, so no wheelchair or anything).

He has suggested I buy them a house outright in the seaside town where they have the holiday home and they rent it back from me, and that I rent the family home from them.
I have severe reservations about this plan, but I'm not sure I can quite articulate them...

He said it would help me onto the property ladder cheaply - but I don't think i see it that way - I'd be making the same investment (the £100k), just into a property that is unlikely to gain in value, that I can't live in. I don't think I would ever feel the family home was 'mine' - obviously i feel completely at home here, but i don't think they'll be able to let go (particularly Mummy). We'd also both be landlords, which is fiendishly complicated in itself. Also, what if things go well and me and the boyfriend want to get married and make babies?! I won't be able to buy a house with him without making my parents homeless... It just seems like a really bad idea to me, but i don't want to sound/behave like an ungrateful wretch who won't help them out.

They own the family home outright (~£220k) and I think they should just sell up and downsize to that area if that's what they want - then they can live off the difference. He thinks the family house won't be suitable for their mobility needs for much longer. I have no expectations or wish of any inheritance. I also have a sister who was rubbish with money so now doesn't have the means to help (and therefore gets to wash her hands of these kinds of dilemmas!).
Are there any other drawbacks to his plan that might help him change his mind?? Or am I being an ingrate afterall?!

Sorry that was so long - it feels like all the details are necessary but they probably aren't!

Cheers...

19lottie82

This sounds like a recipe for disaster to me. Sure it seems like a good idea in principle to your parents but there are so many things that could go its unreal....

Like you I don't understand why they dont just sell and buy their new place with the proceeds.

BitterAndTwisted

I agree with you: they should sell up and buy something appropriate to their needs regardless of your own situation.

You buying a house for them to rent from you is a crazy scheme and has far too many possible risks I can't bear to list them all.

savingmummy

Why do they not want to sell up and move to the coast? Have you asked?

This seems the obvious thing to do to me anyway x

Annisele

I don't think you're being an ingrate at all. I don't see any reason why they can't just sell their existing house and buy a new one - like everybody else who wants to move.

So, bearing in mind that you don't want to buy your parents house, here are some reasons why it might be a dozy idea:

• You marry your boyfriend, then in a few years you get divorced. Now, the house your parents live in forms a major part of your assets - and it has to be sold so you can pay off your now ex-husband.
• You go bankrupt, and the house has to be sold to pay off your creditors.
• You become ill/disabled/unable to work for whatever reason, and you can't claim housing benefit because you've already got a house.
• You die and leave the house to your boyfriend/husband, who doesn't like your parents and evicts them.
• You want to buy a house somewhere else, but you can't because you're already mortgaged up to the hilt.
• Your parents decide they don't like the seaside town after all, but you can't get a new mortgage and you can't buy them a new place - so they move out, leaving you to pay the mortgage on a property you didn't want in the first place.
• Your parents die / get divorced / go bankrupt, and the house *you* are living in has to be sold out from under you.

There are many many other things that could go wrong, but hopefully they will do to start with!

Cissi

Oooh, families, always tricky! Being the eldest child myself, with younger siblings who have been worse than useless in financial (and other) matters I can totally sympathise - it seems likely that you'll be expected to help your parents out for the duration, without much thanks in return!

Please don't let them use emotional blackmail (which is exactly what this is) to get you to do what's best for them. Much as you love your parents and for sure owe them your support to the best of your abilities, to a certain extent at least, they have no right to expect you to give up your own future for their sakes. I'd keep it very simple - the point about you possibly (hopefully!) needing to use the capital yourself to start a family etc while they're still alive should be enough.

Good luck!

Nashie83

Mummy's mummy is still alive and living here (though she doesn't see her often enough) - it is her who is most reluctant to cut ties to home and move away, but the finances are always daddy's thing and I'm not sure if she realises how tight things are (he is also a great exaggerator so I'm unsure how serious it is). I also think she doesn't feel old enough to retire off to nowhere (one of the pitfalls of marrying someone much older than you I suppose).

I have voiced these opinions already, but I've said I'll think carefully about it. He said he couldn't see any problems so I told him he can't have thought it through properly! I'll just try and list the potential things I can think of... I just feel so bad saying 'no' to the people who have made me who I am and given me so much.

Kynthia

Oh no, how difficult! There are no benefits for you as far as I can see, and some fairly hefty downsides.

You will be unable to buy the property you want, wherever that is, when you want too. You will have to get a buy to let mortgage which is higher interest, and you will be subject to full capital gains tax on the house you let to them. You will both have to pay tax on the rental income and deal with issues of repairs and maintenance. Say something expensive goes wrong in one of the houses there might be bad feeling about who should pay for repairs.

Maybe suggest they sell their house to find a new home and mention the tax on the rent they'll need to pay. Say how many buy to let mortgages don't allow family as tenants. Also tell them you're seriously thinking of buying in London in a year or two and this plan would prevent that.

Put it all in a nice letter so that you get your point across, while also still saying how much you love them a appreciate the offer.

Nashie83

Thanks, Anisele - that's exactly the sort of thing I was hoping for! It would be cash purchase though (the theoretical seaside house) - so mortgage wouldn't be an issue - but that has made me realise that I would then have no deposit left, so no chance of buying a house of my choice for myself (and hopefully my own family!) to live in.

savingmummy

Don`t feel bad, its a very difficult situation to be put in but they need to respect you and your reasons for not wanting too!

As already stated so many things plus more could go wrong leaving you in the !!!!

Nashie83

Thanks so much everyone - already you have clearly stated some of the issues I had sort of thought of, but have just been a bit panicked by the whole idea to formulate the ideas properly.
Thanks again - been reading this forum for years (as an FTB wannabee!) and knew you'd be able to help!