Should I help buy my parent's council house?

Mojisola

SephirothX wrote: »

Mojisola I'm confused how they got free council tax while owning their own home. How does that work?

It depends on their income and what benefits they might be claiming.

https://www.ageuk.org.uk/money-matters/claiming-benefits/council-tax-benefit/

vivster

On the long-term care thing, do be aware that the care funding system is being reformed (and not before time), and the means-testing threshold for social care raised to £123k (in 2017/18 prices), so they should be eligible for some state-funded support should it ever come to that.

Also, only about 11% of people go into residential care homes. It's not an inevitability.

Having said that, it seems like it might not be a great idea for your parents to buy their council house now because taking on maintenance costs etc.

carefullycautious

people tend to focus on care/nursing home fees but if they needed any care within their home it would have to be paid for and can cost just as much.

I think what you are proposing to do is madness in that you will have no interest in a home that you are going to be paying half towards. A Home that will need maintaining etc. If either of you had savings that could cover the cost it would be more sensible to pay cash for it.

Also don't forget the bedroom tax. If your parents need any help in the future with housing benefit and you have moved out they will only get the cost of a one bed property.

you all need to sit down and look at the plus and minus of why you want to pursue this at this time in your parents lives.

I know of a lot of people who have bitterly regretted doing this. In fact a neighbour of mine brought a property on a mortgage later in life, got to retirement age and could no longer afford it and has ended up back in LA property due to losing it. She said she would never advise anyone doing what she did.

Do think very carefully about the implications. There are a lot of pensioners who live in unsuitable properties who struggle because they cannot afford to maintain/ do gardens etc. They become trapped because they cant afford to move also.

lambourne

As someone who worked in the public housing sector for over 30 years I would advise against buying - I have seen too many elderly people whose children bought or helped buy their properties then could not cope with the repairs and maintenance required - your parents have just had to ring the council to get things done for the last X years, can they now suddenly start arranging carpenters, plumbers etc, where will they get them from?? I think you are looking at the bottom line like most people in this country i.e. making money from property - this is a home not an investment.

embob74

Would just like to add that prenuptial agreements aren't legally recognised in this country in the same way they are in the USA.
And as far as I'm aware pensioners are exempt from the bedroom tax so that's not an issue at the moment. Of course the govt may choose to change the exemption in the future.

SephirothX

vivster wrote: »

On the long-term care thing, do be aware that the care funding system is being reformed (and not before time), and the means-testing threshold for social care raised to £123k (in 2017/18 prices), so they should be eligible for some state-funded support should it ever come to that.

Also, only about 11% of people go into residential care homes. It's not an inevitability.

Having said that, it seems like it might not be a great idea for your parents to buy their council house now because taking on maintenance costs etc.

Where can I find more information on these changes? Suppose I could Google it but maybe you know of a great source of info.

It seems most people are advising against it now. I'm not too keen on it myself given the circumstances and the fact I could be 50 by the time I see my money back. I have savings and I wouldn't use them to buy the house like carefullycautious suggested because there goes the mortgage deposit on my own place when I want to buy.

I think the bedroom tax is ridiculous for 2 bedroom properties. There simply isn't enough 1 bedroom properties for people to downgrade to. Not only that, you're now going to have older couples competing for 1 bedroom flats with younger kids aged 18-25, making life difficult for them when it comes to renting. The bedroom tax isn't a terrible idea in general but the criteria is nothing short of stupid.

They're now saying you can half own the house and only pay a mortgage for half of it, but I really can not think of one good reason to do that. Presumably they'd only get half the discount then too. Or does the bank buy the other half, in which case we'd get our half for free since the discount is more than 50%? Makes no sense to me.

I think they are looking at change Prenups Embob, but I wouldn't get married before then unless they had similar assets.

vivster

Some info here.

http://www.dh.gov.uk/health/2013/02/funding-socialcare/

Most of the press coverage focused on the cap on costs, but the rise in the threshold is just as significant.

SephirothX

vivster wrote: »

Some info here.

http://www.dh.gov.uk/health/2013/02/funding-socialcare/

Most of the press coverage focused on the cap on costs, but the rise in the threshold is just as significant.

Thanks. It's a shame there's no information on what the sliding scale will look like. I imagine it will still amount to paying a lot towards it.

goodmorningsunshine

SephirothX wrote: »

Mortgage providers don't take into account the possibility you won't retire at 65 though. Quite silly considering it's getting more common and the retirement age will be increased soon.

Mortgage companies do take this into account. I know someone who got a mortgage at 50 and got it for 18 years, = 68 years old when mortgage finishes.

goodmorningsunshine

SephirothX wrote: »

It's 28k after discount but £29k mortgage due to the additional fees.

QUOTE]

Can you not get a loan for half and your parents a loan for half?

Parents Rent = 250 ???
Your Contribution = 250 ???
Total per month = 500 xxx

Ask the bank if you paid xxx per month, how long it would take to pay off 29,000 less any deposit you may like to pay.

It may be 28K but 29K after fees are added, but you don't get a 100% mortage anymore - that I know of, you either have to pay 5% or even 10% deposit, which would be 2,800 off 28K makes 25,200K plus fees. I'm sure you could both get a loan for 13K each, for less than a mortgage term, paying off the loan in a much shorter time, thus you not having a mortgage in your name, only a bank loan.

Do the sums,

Apologies if this has already been mentioned, as seems the easy option, as I am trying to play catch up.