Advice desperately needed

wageslave

I'm a mother of three, two of whom live in decent if not fancy houses. The third lives in a council flat On the third floor. Don't get me wrong, it's a lovely flat once you are in the front door but it's not somewhere you'd want to raise a family or grow old.
I'm thinking of buying him a house, which I've got TBH I can easily afford. I'm a single parent who has worked herself half to death and again, to be honest, my children suffered while I struggled to keep a roof over our head.
I can afford to buy them all houses but that would leave me with sod all and the other two don't really need me to. Doesn't mean they wouldn't like me to.
I'm considering buying a house and renting it out to my son. He will have to pay market value for rent but I will leave the house to him in my will (it'll come out of his share)
Does this sound like a viable plan? Am I missing something really important?
Signed
A mother

xylophone

How about lending the money to your son so that he can buy the property and taking a first charge against it as your security?

You can choose whether or not he pays interest but if he does you must declare it to HMRC.

In your will you can specify that anything remaining of the debt is "forgiven" against his share of the residue etc - your solicitor will advise about the private mortgage arrangement, the agreement, the charge and the provisions of your will.

wageslave

He can't afford it. I'd gladly lend him thr money if he could

wageslave

Ten years ago I was posting on here asking how to feed a family on a pittance. How to heat a house on the fiver I could afford.
Me and mine, we've come through it, we are out the other side. Ive made it but !!!! knows it wasn't easy.
Suddenly I'm a pariah for getting it right?

xylophone

He can't afford it. I'd gladly lend him thr money if he could

He will have to pay market value for rent

Do you have the money to lend him to buy the house outright?

If so, you lend him the money and he doesn't pay rent but makes capital repayments (monthly/annual/as agreed) of an amount he can afford.

Mojisola

I don't understand how you think he will be able to pay you rent but not afford to buy a house if you give him the money?

t0rt0ise

If your son gets Housing Benefit there may be a problem having a relative for a landlord.

xylophone

Suddenly I'm a pariah for getting it right?

I don't see the relevance to your original post.

Mojisola

t0rt0ise wrote: »

If your son gets Housing Benefit there may be a problem having a relative for a landlord.

It won't be possible to get HB for a contrived tenancy - which this is.

xylophone

The OP hasn't said that her son is on benefits or will be seeking benefits?

Annisele

Bit puzzled. If you're going to charge your son market rent on the property, that implies he could afford to pay market rent on a house like the one you plan to buy anyway (even if you weren't the landlord). So - for some reason - he's chosen to live in the third floor council flat instead of in a house.


I've also chosen to live in a flat rather than a house. I could afford rent on a house, but I like my flat. I wouldn't welcome an offer from my parents to become my landlords.



If my parents were making some kind of gift, or planned to charge me less than market rent on the house, I'd find a graceful way to say no thank you. But if there was any hint of 'I don't think the place you're living in is good enough and I want you to live elsewhere', I wouldn't be impressed. It doesn't sound like that's your motiviation - but since you're going to be charging market rent, I don't understand what your motivation is. It wouldn't make things cheaper for your son. He'd benefit by having a landlord less likely to evict him, but he'd lose the ability to make his own choices about his housing. Depending on whether he's renting from the council or just living in a council house, he might also be losing a council tenancy - and that could be a *huge* loss, and make your offer really bad for him.



Plus, if you buy the house outright and then he pays you a market rent (or any rent), then you're going to be liable for income tax on that income. The loan solutions others have suggested reduce or eliminate income tax concerns.