Mum's inheritance doesn't stretch to a house... help!

merlinthehappypig

wibbler wrote: »

It's great that people sympathise - but yes, I agree there are places under £250,000. I suppose my main thrust was whether they should sit on their money at the moment?

You are only going to get personal opinions as no-one knows what will happen with house prices.

Personally speaking, I would not buy at present unless forced to. Just about all the 'experts' agree that house prices are not going to rise much, if at all, over the coming months. Many people think that they are going to fall - this is certainly true of asking prices in my area at present. It is just possible that there will be a big fall. In real terms, therefore, your parents are likely to make more money from investing the £250000 in a building society account than in a house, for the time being.

The income from safely investing £250000 (around £1000 a month at 20% tax) will easily cover the rent on a much better house than £250000 will buy, with money to spare. My rent of £900 a month gets me a house which would cost around £3000 a month to buy, on a 100% mortgage. On top of that, ownership brings other costs such as buildings insurance and responsibility for maintenance.

As other posters have said, your parents have been carers for a long time and why not enjoy some of the money with holidays etc rather than commit to a mortgage at their age?

On the other side of the argument, buying a house within the £250000 budget, without a mortgage, gives them the security of somewhere to live for the rest of their lives.

It's not a decision to be made lightly.

pinkshoes

Well, they've probably got about 20 years to live, so maybe buying a mortgage-free house would be a good idea? Renting would surely equate to £10k a year, so if they think house prices are going to drop MORE than £10k a year, then rent, if not, then buy!

Or maybe they can give you the £250k, and you buy a house and rent it to them for nothing?! That way, if they become ill and require care, they won't have to sell their home and blow your inheritance on a care bill!! (They'd have to live 7 years after their donation to you, for you not to have to pay inheritence tax on it!)

duchy

webtalk wrote: »

Of course, you're assuming that one or both of them will have to go into a care home. That isn't inevitable. Many more people die in their own homes than in care homes.

It would only need to be sold to pay for care home fees for the surviving spouse if they were living alone. It would NOT be sold to fund the care home of one partner while the other is still alive.

True it would be sold after the death of the longest surviving spouse-and fees would then be taken. As this family appears to have an "inheritance expectation culture" it is worth noting in case the OP wants to ensure her inheritence stays intact. Both my parents were hale and hearty into their 70s and had expectations of long and healthy lives. One died very suddenly at seventy and the other suffered a debilitating brain anurism. You can't rely on certanties or that long living healthy genes are a given and accidents add another variable. Care at home even if families are willing and able is not always possible or in the best interests of the parent.

webtalk

wibbler wrote: »

- They weren't expecting anything in return - but it was the only chance of getting anything for retirement, so it was obviously hoped for...

Of course they'd hope for soemthing. They would probably be lying to themselves if they hadn't.

There's a difference between hoping for and expecting.

seven-day-weekend

I personally would buy a house/flat for cash and know I wouldn't have to worry ever again about where I was going to live and how to pay for it. If it was to be my home for the rest of my life I wouldn't care a toss about whether the housing market rose, fell or stayed the same.

I would not want to be trying to outguess what the housing market was going to do, in my 60s.

So for me there would be no contest, I would buy.

South coast definitely for me, if I was in your parents' position.

Just mho of course.

dannyboycey

No need to be hasty.... stick that 250k in a high interest account and you'll get a really nice return on it! If you wish, you could get the money paid monthly and use the interest to supplement income/pension. By my reckoning, you should be able to squeeze out 1300-1400 p/m before tax.

tr3mor

PasturesNew wrote: »

Yes, but you won't. Your spelling clearly identifies you as "peasant class" so no fortune for you.

The avatar confirms this too! :rotfl:

CB1979_2

if they're happy where they are for the moment, I'd rent and use the proceeds of the interest to fund my bills each month.

I'd personally rather put all the cash in an account in your name, but only they have access to it, if you know what i mean just to cover any other IHT/care problems at a later date.

stay away from McCarthy & Stone retirement flats (my office does mainly all them drawings) and they are a rip-off!

lewt

tr3mor wrote: »

The avatar confirms this too! :rotfl:

where as yours is a picture of a small boy what does that say.......:think:

tr3mor

lewt wrote: »

where as yours is a picture of a small boy what does that say.......:think:

Yours obviously implies that you're into Star Wars cosplay!