Right to buy (parents house)

BrassicWoman

tyty21 wrote: »

They came very close to doing so about 20 years ago however decided not to. Now they can't due to their ages as I've previously said...

mmm how many mortgage brokers have they seen? Earning good money, 10 year to retirement age - no problem.

http://www.money.co.uk/mortgages/how-to-get-a-mortgage-if-you-are-an-older-borrower.htm

"Your point fails"

tyty21

BrassicWoman wrote: »

mmm how many mortgage brokers have they seen? Earning good money, 10 year to retirement age - no problem.

http://www.money.co.uk/mortgages/how-to-get-a-mortgage-if-you-are-an-older-borrower.htm

"Your point fails"

I think you've misunderstood here. They will only be earning for the next 10 years and so only have the ability to meet mortgage repayments on their own for the next 10 years. Although my dad earns a decent salary it's not enough to cover 10 year mortgage repayments which would be 2.5x higher than a standard 25 year mortgage. There's a lot of difference between 750 a month and 1875 a month.

So yes your point fails.

BrassicWoman

so they are paying £750 a month, over a third of the mortgage, for 10% of the house?

I'm going to keep thinking you are a money grubber until you can present a proposal that looks fair!

I'd be a lot happier if your parents were posting asking how to help their offspring. They do not appear to be.

Your morality fails.

tyty21

BrassicWoman wrote: »

so they are paying £750 a month, over a third of the mortgage, for 10% of the house?

I'm going to keep thinking you are a money grubber until you can present a proposal that looks fair!

I'd be a lot happier if your parents were posting asking how to help their offspring. They do not appear to be.

Your morality fails.

I really am unsure if you are repeatedly not understanding basic points or you're just choosing to do so to suit your position. The 750 figure might be what the mortgage repayment could be but obviously they are not paying that in rent to the HA now- I would make up the difference between the (significantly) lower rent that they currently pay and the cost of the mortgage repayments- a point I've made repeatedly.

My parents wouldn't know where to start with internet forums and quite frankly they have no interest in doing so.

I really don't know what axe you have to grind here but you are passing judgement on something that has been freely and willingly agreed between family members. My parents want to help me get on the property ladder so they can give me a head start in life (like any parent would want for their child) and I want them to own a property outright so they can spend their pension enjoying themselves rather than spend it on rent- this achieves both of those goals.

If you have a problem with that and insist on judging something based on your own subjective notion of what is 'fair' then it is clearly you who has morality issues.

fewcloudy

Hi tyty21

Kudos to you for your restrained and factual responses to what seem to be rather personal accusations by some. They appear to be rather entrenched in their views and that seems unlikely to change regardless of any further information you provide. Assumptions have been made, their mind is made up!

My opinion, for what it is worth, is that you probably hit the nail on the head in your summing up at the end of post #11.

Best of luck

fc

Daniel54

Leaving aside any other issues ( and you are seeking to game the system,admit it or not),your planned split of 90/10 and then moving out makes no sense as it pretty much maximises your CGT liability if and when you come to sell.Make it 10/90 or even 5/95 and the tax issue falls away (which seems fairer all round ) and reduces your share of other costs such as maintenance of the house.

Better to minimise your share and your parents gift to you when the time comes.

CGT is based on the purchase price of the property

Taking proper legal and tax advice might be a good plan

tyty21

Daniel54 wrote: »

Leaving aside any other issues ( and you are seeking to game the system,admit it or not),your planned split of 90/10 and then moving out makes no sense as it pretty much maximises your CGT liability if and when you come to sell.Make it 10/90 or even 5/95 and the tax issue falls away (which seems fairer all round ) and reduces your share of other costs such as maintenance of the house.

Better to minimise your share and your parents gift to you when the time comes.

CGT is based on the purchase price of the property

Taking proper legal and tax advice might be a good plan

That is an interesting point about CGT that I hadn't considered. I didn't really see myself selling rather when my parents wanted to move I would buy out their share and then rent the property out. However it would be good to have the option to sell without a huge CGT bill so I will definitely explore that further, thanks!

*Also I guess remortgage could also be an option so I could not sell and thereby not incur any CGT but could still get come cash out of the property (for a deposit of my own for example).

Brenster

Putting aside the whole morality issue, as I have looked into the same thing.

Based on the 10% / 90% split, and you saying 10% is worth £25k, presumably the remaining 90% is worth £225k. I do feel that as they are 'gifting' you the right to effectively gain £150k equity (based on £225k value less mortgage, assumed £75k) over night, I feel to charge them rent would be wrong. I intend to treat mine as a pension pot and let my parents in law live rent free.


Some important things to consider are the impact of them, god forbid, passing away or becoming ill and needing care. If either of these happen, the RTB Discount will be taken back (amount dependent on period since taken), or if they need care the government can take the cost of this from the liquidation of there share of the property. So I would recommend getting legal documentation drawn up.


Good luck, ignore the haters

charlieismydarling

tyty21 wrote: »

You don't seem to have understood correctly. It's only by exercising the RTB that they will have sale proceeds in order to fund the purchase of the other half. It's only through exercising RTB that I would be in the position to give them money to fund the purchase of the other half. Therefore without exercising the RTB there would be no property to inherit. Moreover the point is for us to get on the housing ladder asap.

The point about parents of my friends giving there children money is to show people on here that parents give their children money all the time- whether it's money for a house deposit or via an inheritance. No one seems to have a problem with that and yet they do with this even though it is the exact same principle just achieved in a different way.

I really feel people need to be less judgemental when they no nothing of the circumstances or the people involved.

Presumably other parents give their children money which is theirs in the first place, this money you talk of is actually a rare public resource.
This just keeps coming up. It would be less tiresome and irritating if only people would be honest and not try to dress up a monumentallay selfish and greedy act in a veil of altruism and caring for their future.

A more honest post would be like this.

My parents are sitting on a gold mine. Having been lucky enough to obtain a council house when they were allocated in accordance with the principles that they were originally built for I would like to get my share of this good fortune.
They can't afford to buy it. I can. I get the massive discount and can easily afford to charge them a small rent, win win, don't you agree. When I come to sell they get a small amount, thereby encouraging them to think that they get to win too.

We have been lucky to live here cheaply for years and see no reason to pass this resource on yo people who really need it because we would like to screw every last penny out of this. Additionally my parents can't give me any money like my friends parents do and this is the next best thing. Why can't I take take take, everybody else does.

Op people would have more respect if you would be honest!

Jhoney_2

If you have only lived there for 1 year, do YOU meet the RTB criteria?... perhaps so, which is ridiculous imo.

The whole thing seems a bit planned and manipulated - probably with your parents assistance/consent. They get something out of it, you get something out of it and sure that wasn't the purpose of the housing, but hey that's what it takes.

Less affordable housing = higher house prices, so 5/10 years later, do not be surprised if the value of 50% of intended other property is no longer within reach for them financially as less public housing stock becomes available through things like your current plan.

Your question is how do you make it work? - Which is why in the main, the answer you're getting - albeit put differently - is resoundingly that it shouldn't.