Can I buy my dad's house?

Rsmith04

Hi everyone, just after a very rough idea of how to go about buying dad's house, he is a council tenant and qualifies for the max discount on right to buy. Mum died recently, he doesn't want to move now but may do (He won't be able to for 5 years without paying the discount back). I have a repayment mortgage on my house, and wanted to take a mortgage on his (He and my sister will be contributing as well as my hubby and I but I think it would have to be in my name as one is retired and one out of work?). The mortgage will be for approx 90k. What should I be considering other than what would happen if they couldn't meet the repayments? We are seeing an IFA in a couple of weeks but just wanted an idea of if its even possible. Thanks

dacouch

Does any of your family live with your dad?

bris

As far as I know only your dad can buy the house not you. You can give him the money but it's his right to buy not yours, so it has to be done in his name.

G_M

Right To Buy ( and the associated very generous discounts) is intended to help council tenants become hoe owners.

It is not intended to help their friends, relatives, or mates down the pub benefit from those (tax-payer funded) discounts.

Cakeguts

Generally speaking this is a terrible idea for your dad. At the moment he has a secure tenancy that means he can stay in his council house for the rest of his life. Once he has bought the house with a mortgage if he can't keep up the repayments he could quite easily become homeless. I assume that he isn't young any more and to become homeless later in life is not something that anyone would want for a parent?

Your dad is the only person who has the right to buy. If he can't afford to buy it then this isn't going to happen. In any case it isn't in his interest to buy it because he won't gain anything from this.

Rsmith04

Hi everyone, apologies maybe I wasn't very clear. The house would be in dad's name as yes only he has the right to buy, my sister, dad and I would all pay into the mortgage so that dad's monthly outgoings on rent would be halved, and I would have to take out the mortgage for him as he wouldn't be able to get one. The point being that if he wants to move somewhere else he would have a little nest egg and then he can leave the house to my sister and I when he is gone. I was more thinking along the lines of will I be able to get another mortgage as it will be seen as an investment I assume, what happens with tax and also is it sensible - if dad/my sister couldn't afford to pay then we would have to cover the whole payment, we'd never make him homeless. Also as my sister has no family and is vulnerable we thought it would be a good way of setting her up in the future. I am in two minds X

missbiggles1

Rsmith04 wrote: »

Hi everyone, apologies maybe I wasn't very clear. The house would be in dad's name as yes only he has the right to buy, my sister, dad and I would all pay into the mortgage so that dad's monthly outgoings on rent would be halved, and I would have to take out the mortgage for him as he wouldn't be able to get one. The point being that if he wants to move somewhere else he would have a little nest egg and then he can leave the house to my sister and I when he is gone. I was more thinking along the lines of will I be able to get another mortgage as it will be seen as an investment I assume, what happens with tax and also is it sensible - if dad/my sister couldn't afford to pay then we would have to cover the whole payment, we'd never make him homeless. Also as my sister has no family and is vulnerable we thought it would be a good way of setting her up in the future. I am in two minds X

Or it would give him a decent pot of money to fund residential care if he needs it in the future, which is obviously worthwhile.

SnooksNJ

Rsmith04 wrote: »

Hi everyone, apologies maybe I wasn't very clear. The house would be in dad's name as yes only he has the right to buy, my sister, dad and I would all pay into the mortgage so that dad's monthly outgoings on rent would be halved, and I would have to take out the mortgage for him as he wouldn't be able to get one. The point being that if he wants to move somewhere else he would have a little nest egg and then he can leave the house to my sister and I when he is gone. I was more thinking along the lines of will I be able to get another mortgage as it will be seen as an investment I assume, what happens with tax and also is it sensible - if dad/my sister couldn't afford to pay then we would have to cover the whole payment, we'd never make him homeless. Also as my sister has no family and is vulnerable we thought it would be a good way of setting her up in the future. I am in two minds X

I can think of only positives in buying your Dad's council home. There are no tax implications and there are special mortgages for children who want to buy their parents Right to Buy council House. The banks just opened so I would get down there today to speak to a Mortgage Specialist.

davidmcn

Rsmith04 wrote: »

The house would be in dad's name...I would have to take out the mortgage for him as he wouldn't be able to get one.

The vast majority of lenders require the owner and borrower to be one and the same, so you'd have to get over that little hurdle.

Grumpelstiltskin

OP Do you understand what you have been told? That is you can't take out a mortgage in your name to buy your father's house under right to buy.


This is assuming you don't live with him.


Only your father can buy so any finance has to be in his name.

Brock_and_Roll

Cant blame the OP for trying to do this, but the wider consequence is that the net result is yet another social property available to rent being lost from the system.....and down the line an increased housing benefit bill for the government when it has to pay the market rent on what is now a private BTL.


In accounting terms it appears madness.


The council has a house worth say £500 and receives income of say £10 per annum from its tenant. It then sells the fixed asset for say £300 which is a credit for cash but now has a negative cashflow of £15 per annum paying the rents of the private tenant.