Should I sell or let and other queries.

lindarhead

I'm not sure if this query is on the correct board or not but if not perhaps someone can re-direct me. My mum, who is in her eighties has recently moved from her home, which she owns outright, into a flat in a sheltered accommodation scheme run by Sanctuary Housing.She wants me to deal with all things concerning her house but I'm not sure which avenue to take. The house is in Stoke-on-Trent, in a reasonable residential area, and is a three-bed terrace in reasonable condition. The central heating was recently replaced, there are some Upvc windows and it has always been reasonably well maintained. My mum wanted to let it out initially but now she thinks that may be too much hassle, however, she didn't really want to sell it as she wanted to leave it for me eventually. So I have a few questions for anyone willing and able to answer. I myself live in a privately rented house so do know the responsibilities of a landlord, and I am thinking that maybe selling would be best, but whilst the house remains unsold mum is claiming housing benefit to help with the rent she now has to pay, once the house is sold I'm presuming she'll be reassessed, so, question one, if we sell it where is the best place to invest the proceeds for the best return which she'll be able to use to supplement her income and use to pay the rent, which will be around £104 per week? Is it possible for me to buy it from her for a nominal amount, or does the fact that she's claiming housing benefit prevent us from doing this? [I'm thinking it does but she wants to know for sure]. I'm assuming that it's too late now for her to turn the house over to me for the same reason, because of the housing benefit situation? And lastly, what exactly are the pitfalls of letting the house out? I'd be grateful for any input regarding any of these queries.

Many thanks.

missile

I do not believe someone living in sheltered housing can receive benefits while receiving rental income from a house she owns.
If she sells to you for a nominal ammount, I believe this would be classed as deprivation of assets. http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/
She should sell the house and use the funds to enjoy her golden years.

Linton

I take it you do have Power of Attorney to manage her affairs. If you dont, you may find it difficult to do the things that need to be done.

As to what you should do, I would start from the premise that your duty as an Attorney is to manage the money to her best financial advantage. Assuming that there is no chance of her returning to the house, and that she accepts this, then this would seem to me to mean selling the house and to use the proceeds directly for her long term rent and to buy any items that may make her final years as comfortable as possible.

The pitfalls of letting the house out would be the risk of any interruption to her sheltered housing rent - for example if you couldnt find a tenant, a tenant stopped paying, or a tenant caused serious damage to the property. Also you need to consider what would happen to her if something happened to you. How would her interests be safeguarded?

joerugby

My 90 year old father is in a similar position. We sold his house in April and he is using his pensions plus the income from the house sale proceeds to pay his rent and living expenses.

We invested the proceeds in a Monmouthshire BS ISA (2.5% variable), BM Savings 2yr fixed rate saver (3.83% gross) and Coventry Online Saver (3.11% to Apr 13)

The latter two accounts are no longer available - If I were investing now I'd probably use the Tesco Bank 2yr fixed rate (3%) for starters. You'll need another one if she has more than £85,000

If you can, make sure you choose accounts that pay monthly interest - all of the above do

One other thing. Have you checked her eligibility for attendance allowance? We did and Dad now gets an extra £310 tax free every four weeks. Age Concern can help you to look into this, or google it.

Daniel_Elkington

You can technically buy it from her for nothing.

Talk to a solicitor and he can exchange contracts where you could owe her an amount equal to the value of the house secured on the house and pay interest.

She could sell you the house in exchange for a personal assurance that you would pay the money back. She could cancel this debt in her will so on death then it fails.

You'd have to pay her a commercially viable interest rate on a 'repayment' basis and if you are acting as power of attourney there is a massive conflict of interest here.

An easier option would be to just rent it for a respectable monthly amount off her yourself and get her to write it over to you in the will. Use assured shorthold tenancy as it looks more commercial then and there is less likely to be any hassle.

sleepless_saver

Daniel_Elkington wrote: »

An easier option would be to just rent it for a respectable monthly amount off her yourself and get her to write it over to you in the will. Use assured shorthold tenancy as it looks more commercial then and there is less likely to be any hassle.

Any rental solution has the potential problem that if she ever needs residential care and the rent plus her other income isn't enough to cover the costs, the house would need to be sold at some point.

lindarhead

Thank you all for taking the time and trouble to post, you've given me lots to think about.

I don't have LPOA as yet, as this has all happened relatively suddenly but I am onto that.

I'm not sure she'd be entitled to attendance allowance as she is disabled and gets DLA, however, she doesn't get anything like as much as £310 every four weeks. She gets £54 per week, which is just the mobility component, but her circumstances , as in her ability to do things for herself care-wise, have changed and she's now not as able as she once was, so maybe I should look into that.

Regarding willing the house to me, she has already done that, she made her Will last year and left everything to me as her only child.

I'm thinking along the lines that selling would be the best option and finding a good investment for the funds, which I think will probably be around the £55,000 mark.