Right To Buy Advice

puzl

I should add that all of this conjecture about care costs is assuming that they're going to suddenly require residential care later down the line, which is very unlikely, as they're both fit and relatively healthy people In reality, I'd rather pay for any residential care/help costs myself, anyway, but I do of course understand the concerns.

NYM

I'm sure that your parents would have to repay any discount they'd receive if they 'sold' the property to you?

puzl

NYM wrote: »

I'm sure that your parents would have to repay any discount they'd receive if they 'sold' the property to you?

Only if they sold it within the first 5 years I believe. After that, the housing authority no longer has any right to claim back the RTB discount and the house is effectively ours.

puzl

xylophone wrote: »

It is likely that all three names will need to be on the mortgage - even if not you and your parents would still own the home either as tenants-in-common or as joint tenants.

If the house were later transferred into your sole name, your parents would be deemed to have made you a gift?

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS10_Paying_for_permanent_residential_care_fcs.pdf?dtrk=true%5D


http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

Taken from the PDF:

"Foreseeability
The statutory guidance confirms it would be unreasonable to decide you have disposed of an asset to reduce the level of care charges if, at the time the disposal took place, you were fit and healthy and could not have foreseen the need for care and support."

As I say, they're both fit and healthy and are fully autonomous. It would be very much unreasonable at this point in time to assume they need any care and support.

xylophone

The house will be bought outright and the deeds will be registered in three names as joint tenants or tenants in common?

You would "buy out" your parents at the end of five years?

You would need to pay them the open market value of their interest or face possible DoA again under the "both in care home" scenario?

Establishing the OMV of a three way owned property where one of the owners remains in residence could be a puzzle?

That said, I suspect that the Local Authority would look very carefully at the case.

puzl

xylophone wrote: »

The house will be bought outright and the deeds will be registered in three names as joint tenants or tenants in common?

You would "buy out" your parents at the end of five years?

You would need to pay them the open market value of their interest or face possible DoA again under the "both in care home" scenario?

Establishing the OMV of a three way owned property where one of the owners remains in residence could be a puzzle?

Ideally, I'd just get a solicitor to transfer their names off the deeds to the house ASAP, so that it remains mine solely.

When I spoke to the RTB agent website, they emailed me with this reply:

"As the tenancy is in your parents name they will be the ones who have the Right to Buy, however as you have lived at the property for the past 12 months you are able to make a joint application giving you all ownership over the home. You would not be able to apply alone and all of your names will have to be on the deeds of the property. If you were to be added to the tenancy you would not get all of your parents years, as these years belong to them. You would have to build up your own years as a named tenant to be able to apply alone. Once the property has been purchase, your parents can remove themselves from the deeds but you will need to seek legal advice regarding this matter."

It will therefore be a joint tenancy I guess.

Right now, we're deciding the best course of action. As I say, I'd still prefer a 3 or 5 year mortgage, just so I don't spend most of my savings in one go, but if this proves difficult, then I can still purchase outright in cash, no problem.

I'm not concerned about deprivation of assets after reading that PDF, so it's mostly an issue of choosing the smoothest, most hassle-free way to get this sorted.

AdrianC

puzl wrote: »

but in theory, wouldn't I be able to "buy" my fathers share of the asset? Much like purchasing a house from someone, wouldn't they then no longer have any claim to the asset?

Of course. Assuming it's all done at a fair market value. Which, of course, it would be, wouldn't it?

They own half of a house worth £100k, and give their half away, they have a notional asset of £50k they've deprived themselves of.

They own half of a house worth £100k, and sell their half for £50k, they have a tangible asset of £50k cash.

They own half of a house worth £100k, and sell their half for £10k, they have a tangible asset of £10k cash and a notional asset of £40k they've deprived themselves of...

And that value is - of course - at the date of disposition of the asset, after the 5yr lock-in has expired, so would be the full market value, not the discounted RtB sale price.

NYM

There is another consideration...

If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either:

your old landlord
another social landlord in the area

puzl

Bogalot wrote: »

I hope your parents remain fit and healthy, but who knows what the future holds. We all know people who have been seemingly healthy and suddenly had life changing illnesses, if you don't I'm sure your parents will.

Can you afford to pay for social care? You're looking at £600 a week as an absolute minimum for residential care, double that for better homes and those with more complex needs. Home care you should budget £15 an hour for a non qualified carer, three times that for a nurse.

All true, but again, I will quote what it says in the PDF linked earlier in this thread:

"Foreseeability
The statutory guidance confirms it would be unreasonable to decide you have disposed of an asset to reduce the level of care charges if, at the time the disposal took place, you were fit and healthy and could not have foreseen the need for care and support."

From what I understand, joint-purchasing the house and then removing their names from the deeds while they are fit/healthy and in no need of residential care, would mean that this no longer becomes a reasonable deprivation of asset. As such, any hypothetical residential care they'd need in the future wouldn't factor the house as part of their decision anyway.

If i'm wrong about this, feel free to correct me (and please add citations so I can read/educate myself further on it, thanks)

puzl

NYM wrote: »

There is another consideration...

If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either:

your old landlord
another social landlord in the area

Yep, though that isn't a problem. In all likelihood, we're not going to sell anyway. This is a nice house, in a decent area and we're all happy here. Most houses built today simply don't have gardens the size of ours, nor rooms as spacious. They built them well back in the 50s

It's an investment for the future in my eyes. It's a house I love. My parents made a huge mistake not getting a mortgage to purchase it over 25 years ago and they've paid so much money into in via rent that it just seems like we're throwing money away now. I want to own it, have a house of my own that we can all live in, and no longer need to rely on housing benefit or spending both my own income and my parents retirement on rent.