Would this work?

Buzyizzy

I currently live in a SO house in Cornwall which I bought last September on my return to the UK from Ireland. I don't have a mortgage on it and own I believe 62%.
Both of my children now live in the SE and plan to stay there, which I quite understand. However, this has meant that I see very little of them as it is a tortuous journey down and the public transport is limited to say the least. I am approaching retirement age and would like to be nearer them, family is very important to me and as I am on my own, it would be nice to see them more often.
However, as the house prices are extremely high, I am thinking I will rent somewhere using the equity from the sale. I will also gift £5000 to each child every year. I know from experience that once my savings drop below £12.5k (this figure may have changed) I will qualify for assistance with rent.
It seems to me to be the only way I can safeguard their inheritance and live near to them. Has anyone else ever done this and is it possible? I can't see a reason behind it, the only possible hiccup could be if the landlord kicks off that I then receive benefits, but that will be some years down the line and I would hope he/she would know me well enough by then for it not to be a problem.

Red-Squirrel_2

A big possible hiccup you haven!!!8217;t considered is that you!!!8217;d be very very lucky to find a private rental that you could stay in for the rest of your life, unless you go to a retirement complex or similar.

You!!!8217;re more likely to be given 12 month tenancies, staying a few years at each, up to 10 if you!!!8217;re very lucky, but having to move several times with all the costs that incurs.

NYM

Would you qualify for local housing allowance if you gift £10,000 a year?
Might that not be regarded as deprivation of assets?

AnotherJoe

Why on earth worry about "safeguarding their inheritance". Look after yourself first. You could end up in any manner of crappy apartments with terrible landlords, being arbitrarily forced to move on from one to another and reliant on state handouts.


Will the equity in your house finance a small flat, possibly in sheltered housing, somewhere near them, maybe shared ownership?


If my mum had proposed doing what you are, with her house, selling up, moving into rental, giving the money to me, I'd simply not allowed her to do that and i hope your children care enough about you, they wont either. She lived her final years in very nice flat with people of similar ages around her, try to aspire to that rather than being a pauper living in rubbish accommodation.

Buzyizzy

NYM wrote: »

Would you qualify for local housing allowance if you gift £10,000 a year?
Might that not be regarded as deprivation of assets?

Surely lots of people end up needing housing benefit due to deprivation of assets? We had to sell our farm after my husband lost his job and use my savings to pay for the first six months of rent, but we still qualified for housing benefit.:D

need_an_answer

I think the idea is a lovely one,until you look at the reality.

As a LL I WOULD BE ADVISING YOU NOT TO DO THIS.

Many reasons really but the long term security of where you live can only be protected up to 3 years maximum at a time under a fixed term tenancy agreement.


The idea that a LL would get to know you again is a nice one,but even LL circumstances change and what happens when in 10 years time either they or a beneficiary of their property wish to sell,you are out!


I know many LL's who have properties who use them as their own pension fund so you will never be in complete control; over when you leave,I'd like to say that I am a fairly secure LL at present but things in my life will change and whilst I will always try to accommodate tenants my circumstances will always take priority and the choices I have to sell properties should it become necessary will always take precedence over a tenants desire to live there.
I don't mean that to be harsh but being a LL is a business decision not just for me but for many private Landlords.

need_an_answer

Buzyizzy wrote: »

Surely lots of people end up needing housing benefit due to deprivation of assets? We had to sell our farm after my husband lost his job and use my savings to pay for the first six months of rent, but we still qualified for housing benefit.:D

There could be a case of deprivation of assets in the way that the OP describes simply because it was a conscious decision to hand them over with the proviso that the children did not lose out on inheritance.

In other cases if you can prove the need to dispose of the asset perhaps in the way you did through a circumstance then that would probably be classed differently.

bouicca21

Look at retirement flats. Often cheap(ish) but with high ongoing service charges. Important to find a popular one with queues of buyers as some can be hard to sell on.

Buzyizzy

AnotherJoe wrote: »

Why on earth worry about "safeguarding their inheritance". Look after yourself first. You could end up in any manner of crappy apartments with terrible landlords, being arbitrarily forced to move on from one to another and reliant on state handouts.


Will the equity in your house finance a small flat, possibly in sheltered housing, somewhere near them, maybe shared ownership? Sadly no as house prices down here are so low I cannot afford to buy anything anywhere near them. And SO rents are extortionate and I wouldn't have the money to pay for the rent once I've used all the equity to buy the property.

If my mum had proposed doing what you are, with her house, selling up, moving into rental, giving the money to me, I'd simply not allowed her to do that and i hope your children care enough about you, they wont either. She lived her final years in very nice flat with people of similar ages around her, try to aspire to that rather than being a pauper living in rubbish accommodation.

I've already discussed it with my daughter who is the elder child and she is happy for me to live in rental. I don't qualify for retirement accommodation as I am not old enough, but I am approaching that time.

Buzyizzy

bouicca21 wrote: »

Look at retirement flats. Often cheap(ish) but with high ongoing service charges. Important to find a popular one with queues of buyers as some can be hard to sell on.

Not old enough for them.

Red-Squirrel_2

Buzyizzy wrote: »

I've already discussed it with my daughter who is the elder child and she is happy for me to live in rental. I don't qualify for retirement accommodation as I am not old enough, but I am approaching that time.

If your daughter is happy for you to do this, shame on her.

You are throwing away your security so your adult. children can have a few luxuries.

It would be deprivation of assets, needing to sell your home and live on the proceeds is not, that was necessary. Giving the proceeds away to deliberately avoid having to pay rent, that’s not necessary and you could find yourself in dire straits if you do it.