Brother Wants To Purchase Mum's Council House..........

poppysarah

What does your mum think?

Has she considered moving to a bungalow at any point? If so her ability to do this would be severely compromised.

bitsandpieces

You should also be aware that - if your mum ever moved away from her home - owning the house could limit her access to means-tested benefits. If she moved in with you at some future point with you but was still getting carers in for the occasional bit of support (even a couple of hours a week can add up) then she might be expected to pay for this out of her assets.

Another thing to mention is that some councils have a history of upgrading things like insulation to a pretty good standard (which has real benefits for tenants on lower incomes, especially older people). I don't have a crystal ball, but there's a decent chance of this continuing to happen in future. Depending on the details of the purchase (e.g. would it be leasehold or freehold?) this would raise two questions: would your brother be happy to lay out quite a few quid to match this if he didn't have to? And it's possible that the lease might mean homeowners have to contribute to the cost of such upgrades whether they like it or not.

It's good that your brother looks likely to be able to cover any future costs. S*** happens, though - hopefully he has a long and healthy life, but what happens if he becomes unemployed or too ill to work? I doubt he has enough savings to support himself (including healthcare bills, which can be horrific in the US) and maintain your mum's house for decades if the worst happens. What he's suggesting would bring real uncertainty to your mum.

Can you encourage your brother to discuss this with a solicitor/financial advisor who specialises in this type of old age/estate planning? I actually don't think it's likely to be that good a deal for him, even if it seems like it is at first glance. £75k seems like a load of money, but if he's not realising any of this while your mum's alive (hopefully a matter of decades!), taking on a big liability for maintenance charges (and building insurance etc) over a long period, and exposing himself to a real risk of having his own £50-75k wiped out altogether by things like care costs then it's not actually as good a deal for him as it seems. If he wants to invest in the UK property market, it sounds like he has enough money for a BTL place in parts of the country - I'd much rather put my money into that than the type of scheme he's suggesting.

Mojisola

bitsandpieces wrote: »

Can you encourage your brother to discuss this with a solicitor/financial advisor who specialises in this type of old age/estate planning?

Mum needs advice before agreeing to such an arrangement - she's the one with the most to lose.

UnderPressure

Right thanks for all the input and replies I really appreciate it

I am of the thoughts that on the whole it is a bad idea, so I will convey this to my Mum with my findings and also to my brother and then advise him to seek some proper legal confirmation before proceeding any further. Anything that is going to cause her hassle in the future such as down sizing or more suitable accommodation due to health reasons cannot be good for anyone concerned.

Thanks again

Ames

They might need to repay some of the costs of refurbishment, I know that's the case in Leeds, I'm not sure of the timescales though.

bagpussbear

Agree with everyone else here, this is a bad idea for your mum.

She has nothing to gain from the situation, yet quite a lot to lose. There is no security to be gained from him buying the house for her - she has that already.

This is a situation that has the potential to be very messy, and for no need at all. If I were in your shoes, I would let your mum read this thread and do everything you can to urge her to refuse.

Yorkie1

UnderPressure wrote: »

As he is tight fisted but with something like this I really could not see him being unreasonable and if for any reason he acts completely out of character and is then I will encourage her to release some equity somehow so she can get any repairs done that need doing, she would still be in the drivers seat to a certain degree but as said we are a trust worthy bunch so it should not come to this.

This is another example of how it is a bad idea for your mum and, also not great for your brother.

These equity release schemes are great in some circumstances but they have a payback - they are costly and the 'lenders' may get certain rights over the house upon its eventual sale.

Why should your mum have to go to the wholly unnecessary hassle and worry of one of these schemes because she has given in to your brother's hare-brained idea to enrich just himself and he hasn't then kept his side of the bargain for whatever reason?

Mojisola wrote: »

Mum needs advice before agreeing to such an arrangement - she's the one with the most to lose.

+1.

getmore4less

kaya wrote: »

Hmmm, if he brings 100k into the country and " gifts" it surely there would be a huge chunk of tax to pay? There are limits on how much money you can "gift" people without tax implications I beleive

What taxes are you talking about?

00ec25

kaya wrote: »

Hmmm, if he brings 100k into the country and " gifts" it surely there would be a huge chunk of tax to pay? There are limits on how much money you can "gift" people without tax implications I beleive ,

wrong - no such limits. Time you stopped believing and started finding out

pineapple123

I also agree bad idea for mum, brother by the sound of it knows the risks already, hes got his head screwed on and finding a 'small' risk to invest in.
Is he really doing it for mum, if she became unwell would he really want the best for her by agreeing for her to sell up and recieve care in a home or be rehoused in more suitable/disabled accommodation or would he be likely to put pressure on everyone including mum thats its best for her to stay put no matter how difficult day to day living could become.