Help please

Rocky99

Help me, stupid move!!
Hi to anyone who reads this and a big thank you for any advice in advance!

Ok here's my situation:

Own a house which is in £25000 negative equity, moved out due to neighbour dispute and house too small for growing family. Rented out since we moved out 3 yrs ago no problems but having to add around £150 a month to the rent to pay mortgage (btl mortgage)

For last 3 years rented a house we have fallen in love with. Landlord will sell it to us but couldnt get a deposit big enough. We can continue to rent for the next three years (hopefully) that's if landlord doesn't want to sell before then!

Ok so this is the BIG problem we have!
Two years ago my elderly father attempted to commit suicide. He was ok but the attempt uncovered the fact he had racked up £80000 worth of debt. They were in a hole with the only positive being the fact they owned their house out right. They looked into equity release but didn't release anywhere near enough to pay debts. So in my blind wisdom I managed to talk my husband into purchasing my parents house for £150000. My parents had a majority of the money and we had enough to get a car as ours was ruined. At the time of purchase the house was valued at £250000, we had it valued last week and it came back at £200000, £50000 drop in two years!!

So right now we are struggling financially monthly as my parents live rent free and could not possibly afford to pay anything as they barely get a pension worth mentioning. We are having to pay towards our other house and trying to support our growing family!

We did initially see my parents house as a pension for when we were old but it's dropped so much and possibly more in the future!
I know this must seem rediculous to some people but I felt I had to somehow help my parents, I know it was a massive thing to do and honestly didn't give enough thought to it but just wanted to give my dad a break!

One of the main questions I need to know the answer to is, can my parents claim housing benefit to help us financially?
I have read "You may be excluded from Housing Benefit by this rule if you pay rent to a close relative who also lives in the home, or to a former partner for the home where you used to live together. It can apply if you pay rent to a company or trust that you have some connection with. It can also apply if you (or your partner) used to own the home and your ownership ended within the last five years." so if it is possible we can't do it for three years as they used to own it?

I'm sorry for the long post but I'm so scared ive made us bankrupt in an effort to save my parents?

welshmoneylover

Rocky99 wrote: »

Help me, stupid move!!
Hi to anyone who reads this and a big thank you for any advice in advance!

Ok here's my situation:

Own a house which is in £25000 negative equity, moved out due to neighbour dispute and house too small for growing family. Rented out since we moved out 3 yrs ago no problems but having to add around £150 a month to the rent to pay mortgage (btl mortgage)

For last 3 years rented a house we have fallen in love with. Landlord will sell it to us but couldnt get a deposit big enough. We can continue to rent for the next three years (hopefully) that's if landlord doesn't want to sell before then!

Ok so this is the BIG problem we have!
Two years ago my elderly father attempted to commit suicide. He was ok but the attempt uncovered the fact he had racked up £80000 worth of debt. They were in a hole with the only positive being the fact they owned their house out right. They looked into equity release but didn't release anywhere near enough to pay debts. So in my blind wisdom I managed to talk my husband into purchasing my parents house for £150000. My parents had a majority of the money and we had enough to get a car as ours was ruined. At the time of purchase the house was valued at £250000, we had it valued last week and it came back at £200000, £50000 drop in two years!!

So right now we are struggling financially monthly as my parents live rent free and could not possibly afford to pay anything as they barely get a pension worth mentioning. We are having to pay towards our other house and trying to support our growing family!

We did initially see my parents house as a pension for when we were old but it's dropped so much and possibly more in the future!
I know this must seem rediculous to some people but I felt I had to somehow help my parents, I know it was a massive thing to do and honestly didn't give enough thought to it but just wanted to give my dad a break!

One of the main questions I need to know the answer to is, can my parents claim housing benefit to help us financially?
I have read "You may be excluded from Housing Benefit by this rule if you pay rent to a close relative who also lives in the home, or to a former partner for the home where you used to live together. It can apply if you pay rent to a company or trust that you have some connection with. It can also apply if you (or your partner) used to own the home and your ownership ended within the last five years." so if it is possible we can't do it for three years as they used to own it?

I'm sorry for the long post but I'm so scared ive made us bankrupt in an effort to save my parents?

Let me get this straight, you bought a house for your parents to live in it rent free but are expecting the tax payer to pay for it?

In a nutshell, no you nor they cannot claim HB to pay for it and quite rightly so.

Dunroamin

I don't think you can claim LHA for a property you've previously owned. Can't they pay rent out of the remains of the capital they received when you bought it?

pickpocketlocket

Dunroamin wrote: »

I don't think you can claim LHA for a property you've previously owned. Can't they pay rent out of the remains of the capital they received when you bought it?

You can claim if the property was sold in order to avoid repossession, but it doesn't sound like it got that far? I don't know, I gave up reading after a while!

The biggest barrier will be proving the tenancy is commercial after having allowed them to live there rent free.

OP, are your parents not eligible for Pension Credits?

[Deleted User]

i think they had to have sold it at least 5 years ago,and as above pension credit?

Caz3121

Also they may face deprivation of capital. They sold a house valued at £250k for £150k so they basically gave away £100k so they could be treated as still having this (or at least some of it) so would affect any means tested benefits

paddedjohn

Sell your parents home and use the £50k to either put a deposit on a small affordable flat/house for them or use the £50k to pay a chunk off your btl mortgage and let your parents live there.

PippaGirl_2

The problem is they disposed of capital by selling a house to you at way under its value. You moan that the house is worth £50,000 less than it was valued at when you bought it, but remember it is still worth £50,000 more than you paid for it. That is quite a profit and return!

Morglin

You can sometimes claim LHA, if renting from a family member:

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member#1

(I would give SHELTER a ring, as they are good with knowing the way to proceed).

I would also do a check to make sure that your parents are claiming all they are entitled to:

http://www.turn2us.org.uk/benefits_search.aspx


Lin

Mara69

They have (had?) £70k left over after selling their house (for a pittance). Why aren't they paying their rent out of that? Or are you telling us that they have a) given it back to you or b) spent it in two years?

marybelle01

I am probably getting confused by all the information, but if you couldn't afford the deposit on the house that you live in and are having to pay more on the mortgage of your former family home than you get in rent, where did you get £150,000 to buy your parents home? And I don't understand how your parents had "the majority" of the money from the purchase you made, but you had enough of it to buy a car? If you purchased the house, then surely you paid the purchase price to your parents.

It honestly sounds to me like you have done something dodgy here - where did the £150,000 come from?