Can we buy parents house outright then let them live in it?

TheSilentMeow

My husband and I want to buy his mothers house outright for the full value, which Zoopla estimates is approx £75k. We will be raising this by re-mortgaging my property. The mortgage left on his mothers property is £40k, so the £75k will pay that off leaving £35k over, which she will use to pay for renovation work on our property, meaning on paper we will have bought for the full value, but in reality we will have only paid £45k as the rest is essentially being used by us. She would be responsible for covering council tax and bills etc and would probably give us £150-£200 a month or whatever she can afford as rent. Currently her mortgage repayments are £450, and with bills and council tax etc, she is left with hardly anything to live on. We saw this as a solution that would benefit us all.

We are really eager to do this but someone I've spoken to about it says we are not allowed because it is a sale and rent back scheme and its now regulated by the FCA, so it would be illegal for her to live there after. I was wondering if anyone knew anything about this and could advise us on the best way forward.

Thank you.

Dan-Dan

TheSilentMeow wrote: »

My husband and I want to buy his mothers house outright for the full value, which Zoopla estimates is approx £75k. We will be raising this by re-mortgaging my property. The mortgage left on his mothers property is £40k, so the £75k will pay that off leaving £35k over, which she will use to pay for renovation work on our property, meaning on paper we will have bought for the full value, but in reality we will have only paid £45k as the rest is essentially being used by us. She would be responsible for covering council tax and bills etc and would probably give us £150-£200 a month or whatever she can afford as rent. Currently her mortgage repayments are £450, and with bills and council tax etc, she is left with hardly anything to live on. We saw this as a solution that would benefit us all.

We are really eager to do this but someone I've spoken to about it says we are not allowed because it is a sale and rent back scheme and its now regulated by the FCA, so it would be illegal for her to live there after. I was wondering if anyone knew anything about this and could advise us on the best way forward.

Thank you.

Struggling to see how this benefits anyone but you ?

Cant the mother tighten her belt and look to live within her means? Any security she has now is well and truly gone with this plan, especially as she would be using HER equity to make it nice for when YOU come to occupy/sell it

pinkteapot

So, mother's mortgage gets cleared but she loses all of the equity in her house (£35k) because she has to spend it renovating your house. All she gets for giving up that £35k is the ability to pay £150-200/month instead of £450/month in mortgage/rent costs.

pinkteapot

Dan-Dan wrote: »

Struggling to see how this benefits anyone but you ?

Cant the mother tighten her belt and look to live within her means? Any security she has now is well and truly gone with this plan, especially as she would be using HER equity to make it nice for when YOU come to occupy/sell it

I read it as being that mother has to spend the £35k on OP's house, not the one she lives in!

Guest101

TheSilentMeow wrote: »

My husband and I want to buy his mothers house outright for the full value, which Zoopla estimates is approx £75k. - Zoopla is not that accurate btw. We will be raising this by re-mortgaging my property. The mortgage left on his mothers property is £40k, so the £75k will pay that off leaving £35k over - which you will give to his mother? , which she will use to pay for renovation work on our property - Why would she do that?, meaning on paper we will have bought for the full value, but in reality we will have only paid £45k as the rest is essentially being used by us. She would be responsible for covering council tax and bills etc and would probably give us £150-£200 a month or whatever she can afford as rent. - where is the benefit to her??!! Currently her mortgage repayments are £450, and with bills and council tax etc, she is left with hardly anything to live on. We saw this as a solution that would benefit us all.

We are really eager to do this - yes im not surprised! but someone I've spoken to about it says we are not allowed because it is a sale and rent back scheme and its now regulated by the FCA, so it would be illegal for her to live there after. - that's rubbish. I was wondering if anyone knew anything about this and could advise us on the best way forward.

Thank you.

It's legal from a housing point of view.


Not sure about the morality of it.... nor the legality if she's not really 'with it'.


(that's a lie I am sure of the legality if she's not really with it)


You sound like you're ripping her off (which you are)

pinkteapot

Also, from an inheritance tax and care home fee point of view, she'll have sold her house and then gifted you £35k.

Person_one

TheSilentMeow wrote: »

We are really eager to do this

I bet you are!

Don't though.

davidmcn

TheSilentMeow wrote: »

We are really eager to do this but someone I've spoken to about it says we are not allowed because it is a sale and rent back scheme and its now regulated by the FCA

It might be if you were doing it as a business (in the same way that lending money would be). But you're not, so it isn't.

TheSilentMeow

OK, over the past few years we have pretty much done everything in her house, new kitchen and bathroom for her as the others were falling apart and she hated them and any time any maintenance needs doing we get it done. We have always paid for everything and reasoned that my husband would inherit the property eventually, but more than that we wanted her to have a nice home and she couldn't afford to maintain it herself! She currently pays £450 a month in mortgage repayments which leaves her very little to live on, she's not the best with her money and this way she would save at least £250 every month to spend however she wants. We would never kick her out! So please don't insinuate that sort of thing. I've come on here for advice thanks, not for lessons in morality. By the way, she wants this more than us, as she trusts us implicitly, and says it will be her way to help us as she's never been able to ever help us financially, not that we've ever asked or wanted her to, but she has always wanted to and is more than happy with the plan.

TheSilentMeow

pinkteapot wrote: »

Also, from an inheritance tax and care home fee point of view, she'll have sold her house and then gifted you £35k.

She won't be gifting it to us, she would just be buying things and paying tradesmen with it, as we are having our house renovated, so it's just her spending her money however she want isn't it?

Dan-Dan

You must be having a bloody laugh, it`s so see-thru you should be ashamed