Renting house to pay for care fees

ecclesto

I am currently the landlord to my mums house who is in a nursing home and self funding.All her premium bonds of £30,000 have been used and I am about to start using her ISA. I anticipate having to use this within the next 12 months. New tenants are about to move into her house. I have heard that some councils will let me continue to let the house once the ISA has gone and they will fund her care home until she dies and then we can sell the house to pay them back. Is this true and is it all councils or just some? If I can do this how does it work?

csgohan4

here is a link which is quite useful from carehome.co.uk

http://www.carehome.co.uk/fees/feesadvice.cfm

But in a nutshell:

'If you have been assessed as needing a care home place and your capital is below £23,250, you should be entitled to financial support from your local authority.'

theartfullodger

Difficult position, we had similar with my mother-in-law.

ecclesto wrote: »

I am currently the landlord to my mums house who is in a nursing home and ....

Just to clarify: Mum owns the house, you say you are landlord (so presumably named as landlord on tenancies??) . To do that you would need authority (eg a tenancy agreement with you as tenant allowing you to sublet) from mum: Do you have one, please?? (If not it is a right legal mess...).

If you have no such agreement (written, written!) suggest mum gets named as landlord for new tenants, with you as "agent".

Who (you, mum..??) is declaring how much of ALL the rental income??

This might be helpful...
https://forums.moneysavingexpert.com/discussion/5180214

Niv

ecclesto wrote: »

I am currently the landlord to my mums house who is in a nursing home and self funding.All her premium bonds of £30,000 have been used and I am about to start using her ISA. I anticipate having to use this within the next 12 months. New tenants are about to move into her house. I have heard that some councils will let me continue to let the house once the ISA has gone and they will fund her care home until she dies and then we can sell the house to pay them back. Is this true and is it all councils or just some? If I can do this how does it work?

We did this for my grandmother and I can confirm that IoW council (there is probably more than one - I don't know which) did allow us to continue renting her home until she passed which accruing a bill and then pay the balance after death.

G_M

Talk to the LA.

But it seems far more sensible all round to sell the property now. Since the rent is clearly coming nowhere near funding your mum's care, what is the point of making extra work/anxiety for yourself? Unless she dies in the next 12 months, you will not have the house as an inheritance anyway.

Your old tenants have left. It's a convenient time to call it a day - unless you've actually signed a new tenancy?

By the way, I trust you've been declaring the rent to HMRC? They will want their share too, if not now then in due course........

G_M

theartfullodger wrote: »

Difficult position, we had similar with my mother-in-law.



Just to clarify: Mum owns the house, you say you are landlord (so presumably named as landlord on tenancies??) . To do that you would need authority (eg a tenancy agreement with you as tenant allowing you to sublet) from mum: Do you have one, please?? (If not it is a right legal mess...).

If you have no such agreement (written, written!) suggest mum gets named as landlord for new tenants, with you as "agent".

Who (you, mum..??) is declaring how much of ALL the rental income??

This might be helpful...
https://forums.moneysavingexpert.com/discussion/5180214

Unless OP has POA.

G_M

bradelyjacc wrote: »

Before to pay you can be check mall the laws and than to pay , According to law I don't think so you will be pay to that .

Good. Glad we've clarified things for the OP.

ecclesto

Thank you all for your advice!
To clarify:
The house is paid for, no mortgage and in my mums name.
The house will be let through an agent as I live 150 miles away and don't want the stress....
I do declare all her income and she has paid tax ...
I am aware that we will have to use all her money until she only has £23,000 left although I thought there was going to be an increase in the amount you could be left with...
If the current tenants go wrong the I will definitely sell the house

PasturesNew

if you are considering renting or selling, then this works better in an area where house prices are increasing by more, annually, than the fees on the home. That way you're "locking in" the current house value.

If the house won't be increasing in value by more than the home fees and you rent it out then you could be creating a lot of work/hassle for yourself until such time as it is eventually sold.

Selling it you bank the money and gain an income from interest. While that's a low amount, it's at least "money in the bank" and there are no maintenance costs or voids on banked money. The bank doesn't call you in the middle of winter needing £3k for a new boiler to be fitted this week. The bank doesn't call you to say the tenants have left and it'll be empty for a month or more.

There are no agent fees with money in the bank, nor are there insurances to be covered.

In short, unless there's a significant belief that the future value of the house is about to really boom/blossom .... you might find you're stressing your nuts off for the next X years for a gain for £1-2k/year.

So, make your choice - but at least do all the sums and consider the possible drawbacks/hassle.

teddysmum

One problem with leaving the debt until death is that the debt accrues interest,with some councils charging a high rate.
Apparently the allowance before help is to rise, but near the threshold, I imagine the help will be very small, as full subsidy only occurs when assets are down to around £14000 (also to rise slightly).

patman99

If you sell, then you can use social lending sites like ZOPA ans Wellesley to lend out some of the money to receive a higher return than a bank account.