Giving an elderly relative money to right-to-buy

carlbcfc

The step-grandparents live in a flat Zoopla values at around 49-52k. With their 50 year tenancy I believe that gives them the full 70% discount. They have asked the question weather a relative can buy the house for them, or, 'loan' them the money to buy it. Their thinking is it will be a nice little inheritance for their family when they have gone.

As I use this site, I said I would ask the question. There is also the fact they are elderly, and on benefits where they cannot have an asset above 16k. This I am not totally clear on.

Does anybody know more on this. Thanks.

Yorkie1

Given their assumed ages, they will be unable to obtain a mortgage.

Therefore any family member would need to give them the money in cash. The family member could take out a loan to obtain that cash if needed, but not a mortgage secured on the property.

What I don't know, is what impact the donation of the cash to buy the property will have on their benefits. My hunch is that it would have to be declared and thereafter they would be deemed still to be in possession of the money, even if they then choose to spend it on buying the property.

One thing which you all need to consider is whether this is actually in their best interests. I would suggest that it is not. At present, they are in a secure tenancy and have the right to live in the property without interference as long as they wish. They have no responsibility for any maintenance.

If they were to buy the flat, that would change immediately. If the council decided to do any large works to the flats (roof, lifts, windows, etc etc) then those people who own the flats will have to stump quite a bit of money without any influence over the amount or timescale. If the boiler goes, they have to fund it. And so on.

TBH I don't think these older people need the hassle, just for the sake of trying to pass on an inheritance. Their interests have to come before those of a family which has no entitlement to anything in this position. (I know you're not posting from the position of greed, but lines sometimes get blurred once the ££ signs appear in peoples' eyes).

Let the step-grandparents continue to live there in their secure position.

Owain_Moneysaver

If the step-parents buy the flat, it may have to be sold at a later date afterwards to pay for care, so there won't be much/any inheritance to leave.

At such a low value it may be difficult to sell it for enough money to buy anywhere else eg if they need to move to ground floor accommodation, whereas they would probably be priority for rehousing by the social landlord if the existing flat became unsuitable.

Mojisola

carlbcfc wrote: »

The step-grandparents live in a flat Zoopla values at around 49-52k. With their 50 year tenancy I believe that gives them the full 70% discount.

They have asked the question weather a relative can buy the house for them, or, 'loan' them the money to buy it.

No to both questions. Someone could give them the money to buy the flat but it would then be in their names.

As the others have said, they would then be responsible for all maintenance and upkeep of the flat and there could be problems if they need to move to somewhere more suitable or need residential care in the future.

carlbcfc

Sorry I was not clear. It is a ground floor flat with a wet room built in. It has all an immobile 84 year old could need, including a very nice secure communal garden.

Yes, it is easy to forget how good the council actually are when it comes to maintaining. They do come and fix things that would otherwise cost and arm and a leg without not hassle. On this point, I don't see this would be an issue, but still needs to be considered.

I 'think' the need to sell to fund care is no longer, but there is something about 16k assets, although not sure what..?

Mojisola

carlbcfc wrote: »

I 'think' the need to sell to fund care is no longer,

What do you mean by this?

but there is something about 16k assets, although not sure what..?

Housing Benefit (which they wouldn't need if they owned the flat) and Council Tax Support can be affected by capital over £16k but not if they are receiving Guaranteed Pension Credit.

If someone gives them the money and they use it to buy the flat, it won't count as deprivation of capital because they are securing their home and won't need to claim HB in future.