Building an annex

DTDfanBoy

Why does she have to purchase a flat to live in, surely she could just rent a flat and keep the money in the bank.

It is fairly inevitable that if she invests her life savings in your property it is going to make things very complicated in years to come.

xylophone

surely she could just rent a flat

She might not want the insecurity of renting.

Errata

I'd suggest the four siblings cough up £5k each so mum can buy a flat outright, because she's going to be up crap creek if you have to sell your house and she's living in the granny flat.

bluebaron

Hi All,

Just to confirm that if she rented a flat that would eat through her 100k very quickly eevn with wise investments leaving her without anything. As for chipping in to buy a flat, on a pension of £800 a month with all bills would also leave her in a bad position with running cost's etc.

Very difficult one this so many ways for it to wrong.

I think the best way for me is to take her £100k and build the extension on the proviso that when she dies the money is gone. She gets the benefit of having rent free accommodation for the next 20-30 years without having to worry and forgo any inheritance.

Renting a flat with maintenance and bills etc over 20 years would be £240k at £1000 a month.

bitsandpieces

It's great that you're looking to support your mum, but be aware that this could be a very long-term commitment. What happens if you decide you want to move house in 20yrs time but your mum is healthy and wants to stay in her annex? You may not be planning to move, but things can change over time.

Hopefully your mum will live a long and healthy life, but if she does start to need more care is this something you're prepared to arrange? It's great if you are able to take care of her, but this could mean that your retirement is more active than you might have expected.

Your mum could consider whether any council/housing association sheltered housing places are available (there's an oversupply of these in some areas, and lower rents would stretch her savings further; she would also get security of tenure). She could also consider shared ownership - again, getting security of tenure and having something to pass on.

Might be worth her chatting to Age Concern or similar about her options. If you're happy to take on this long-term commitment, that could be a good option. It may also be that, if your mum continues living in her own place, she will be able to supplement her pension with her savings until she is eligible for means-tested benefits. From the sound of it, a sensible focus would be for her to support a good quality of life while living in the part of the country she wants to.