Advice Please. Want to buy house from Mum but can't afford London prices.

tryinhard

Hi,
My mother is moving from our family home which she owns outright, no mortgage, into another house she owns, outright, no mortgage.
My brother has lived in the 2nd home for 15 years, rent free and will continue to live there with my mother.
I have lived across the road from my mother and father (deceased) ever since moving out 25 years ago into rented property.
My half sister has her own home, no mortgage.

Since my father died last year I have said I would like to buy the family home, as I have 3 children and currently pay £1300 a month rent for a house with no double glazing and a boiler you have to light with a twisted bit of newspaper in a lean to in the garden. But it is a good size and across the road form my parents, so I was able to help out when needed.
My sister has said that my mum can't sell me this house for less than market value, as my mum has promised to give both my sister and brother a third of whatever I pay.
I just can't do this with the current extortionate values of the houses in our area, Tottenham, North London.
I put forward the idea that Mum could gift me the house and I would happily draw up legal papers saying that I would pay my mum, sister and brother a monthly amount to cover their share or even take out a mortgage on the house once it was in my name to pay them all off in full in one go.
Nether were happy with these suggestions and instead convinced my mum to change the Title Deeds of the Family home into a Joint Tenancy with all our names on. I will now have to buy them out individually.
Is there a 3rd way that means that i don't lose the chance to provide MY family with a home we own, stay in the area close to work and school and don't make the rest of my family feel like I have ripped them off because some clown has said this house is worth near half a million pounds this year rather than the 250k it was worth last year when my dad died?
N.B Neither my brother or sister have any children and are highly unlikely to have any in the future due to age and health.

agrinnall

First off you need to find out what the house is really worth, it's very unlikely to have doubled in value in a year but we (and probably you) have no idea which, if either, is the right value.

How much are you able to afford to pay? If that amount is equal to 2/3 of the market value of the house then you're sorted, buy it for that and your mum splits that amount between your brother and half sister.

If it turns out that you can't afford to buy the house then the sensible option is for your mum to sell for market value, give you 1/3 of the proceeds, then you can see what you can buy in the area.

TBagpuss

It is entirely up to your mother whether she wants to sell the house to you at an undervalue. If she doesn't, for whatever reason, including a wish to be fair to you and your siblings, then the obvious way forward would be for you to see whether you can get a mortgage for 2/3 of the value of the house. You could then pay your mum 2/3 of the house value, and your mum can give 1/3 each to your siblings.

If you can't afford a mortgage of that size then you could consider whether your mother would be open to giving you a bigger share of the house, and ensuring that your siblings have a larger share of the other house, or other assets she has, in her will.

Have you actually looked into whether you could get a mortgage?

I agree that step one s for your mum to get an up to date valuation of the house, to ensure that any agreements about buying out your siblings is fair to all three of you.

I am not sure why you feel that the fact your siblings don't have children is relevant.? Is it possible that you've let your wish to provide the best for your children overshadow other considerations? In particular, have you left your siblings with the impression that you feel you deserve more than them because you have children? If this is a possibility, it might help you to negotiate with them if you are able to reassure them that you are not seeking anything other than your fair share. (bearing in mind, of course, that your mother is not under any obligation to give any of you anything)

thistledome

What is your Mother planning to do with the house?

Seems a bit unfair that your Brother is getting away with paying rent, seeing as how he's so concerned that you pay market value for something!

tryinhard

Thanks for the speedy response.

My parent had the house valued in early 2014 and it came in at £265- £315k with some updating.
Last month two estate agents came and gave values of £425k-£450k & £450k-£495k with some updating.
So an exaggeration on my behalf, but seeing some similar houses on the market in this area are now on for £600k has really freaked me out and makes staying the area I grew up in, work in, brought my family up in and love, look further and further out of my reach. Even with a quarter share if the house were sold and split between us, I don't think I could buy something round here that would, comfortably, meet our needs. Second floor maisonettes on a housing estate wouldn't be on my wish list, but probably in my price range.
I am not after something for nothing, just a chance to provide for my family and do right by the others effected, without feeling like I'm trying to rip the others off.
Thanks for your thoughts.

emmatthews

Do you know how much you could raise on a mortgage & do you have any savings?

missbiggles1

tryinhard wrote: »

Thanks for the speedy response.

My parent had the house valued in early 2014 and it came in at £265- £315k with some updating.
Last month two estate agents came and gave values of £425k-£450k & £450k-£495k with some updating.
So an exaggeration on my behalf, but seeing some similar houses on the market in this area are now on for £600k has really freaked me out and makes staying the area I grew up in, work in, brought my family up in and love, look further and further out of my reach. Even with a quarter share if the house were sold and split between us, I don't think I could buy something round here that would, comfortably, meet our needs. Second floor maisonettes on a housing estate wouldn't be on my wish list, but probably in my price range.
I am not after something for nothing, just a chance to provide for my family and do right by the others effected, without feeling like I'm trying to rip the others off.
Thanks for your thoughts.

Why a quarter share when there are three of you?

Why not negotiate a reasonable but below market rent with your mother and move into her house?

tryinhard

@TBagPuss I mentioned the 'children' issue as it was brought up in some similar forum posts, so I thought I would try and be preemptive.
Last year I approached my bank and they agreed to give me a mortgage based on a quarter share of the family home, but that was at last years price when my income would have gone further. My income hasn't increased. We don't have any other security as the bulk of our income goes on rent, utilities etc, so no significant savings, which means relying on the share in the house to stand as security.
I hope I haven't made my siblings feel that I deserve more because I have dependents, but that could be the case. My sister has said that we should move somewhere more affordable with a quarter of the cash, I got quite upset and said that we needed to stay as my youngest 2 are sitting and starting GSCE's and my eldest is in Uni. Looking from her point of view I can see how that isn't really her problem and how I must have come across. Point taken.

tryinhard

@missbiggles1 The house will be split between my 2 siblings, me and my mum. Fractions were never my strong point. I would have a quarter share of the house and the remaining would be split into a 3.
My sister wants to buy some land next to her property or another gite in the village to rent out, so needs the cash. My brother also wants to buy a house to rent out near the house he will share with my mother. And my mums got some things she wants to do too, so it's either I buy it or we all sell.

xylophone

The house you rent seems to suit you but is in need of renovation.

Would the owner sell?

If your mother sold her house ( I assume the transfer to TiC has not yet occurred) and gave you a share of the proceeds, would this be enough to enable you to raise a mortgage to purchase and improve your rented property?

Gigervamp

How much would your brother have paid in rent over 15 years if he'd had to pay it?

I'd have thought for fairness, that should be deducted from the value of his share of the house.