Some advice please

m3ssy

Hi all

I’m in a tricky situation and could really do with some advice as I don’t know what to do for the best!

I’m in my 30s living at home with my mother in the south east of England. She owns 1/3rd of a property; the other 2/3 is owned by a ‘family’ member – more on that later. To cut a long story short, she is now an old pensioner and cannot really afford to live on her pension, even with my significant monthly rent/contributions, and has suggested selling so she can ‘live off the cash’. We estimate her property to be worth £300,000, so that we be around £100,000, minus outstanding mortgage balance (around £7,000)

I have somehow managed to get myself out of crippling debt and have a reasonable job (£39K pa) and £40K in savings; however, this is not enough to be able to afford anything decent in the local area. I feel that if my mother sells up and spends all that cash, it is essentially throwing money down the sink. I’d rather her have an asset that provides an income or some capital growth. Selfishly I don’t want to end up with nothing at the end considering I’ve contributed to keep the 1/3 house going over the past 10 years! She also desperately wants to give me an inheritance.

The complication is the ‘family’ member who will ask for their 2/3 back due the second charge on the property. The agreement is quite complicated but it states that after the first mortgage is paid a new repayment plan will take effect – essentially new mortgage repayments on the remaining 2/3. This is what is currently causing a lot of stress as the primary mortgage probably only has 2 years remaining.

Therefore, my thoughts now are this, either:

• Allow my mum to sell up and live off the money – I’d have to rent or reconsider options
• Sell up and release the 100K as a deposit for me and we buy something ‘together’ in the south east
• Sell the property and buy some property in the north, perhaps as an investment with rental income (for her). Then rent together in the south east so we can live near friends and family.
• Her sell up and move up north
• Offer to pay the 2/3 of the mortgage off the family member with my own mortgage.

Any thoughts/suggestions would be greatly appreciated.

Thank you for your time 

AdrianC

m3ssy wrote: »

I’m in my 30s living at home with my mother

How much longer do you want to do that? Are you planning on building a life for yourself at any stage?

To cut a long story short, she is now an old pensioner

If you're in your 30s, then I'm going to guess she's somewhere between late 60s and mid 70s...?

Selfishly I don’t want to end up with nothing at the end considering I’ve contributed to keep the 1/3 house going over the past 10 years!

Umm, you've had a home for a decade of your adult life... That's hardly "end up with nothing".

She also desperately wants to give me an inheritance.

"Inheritance" is what she owns when she dies.

The complication is the ‘family’ member who will ask for their 2/3 back due the second charge on the property. The agreement is quite complicated but it states that after the first mortgage is paid a new repayment plan will take effect – essentially new mortgage repayments on the remaining 2/3.

That doesn't seem at all unfair.

Offer to pay the 2/3 of the mortgage off the family member with my own mortgage.

<£39k income and £40k in savings would mean you getting a £160k+ mortgage to buy out your relative. You should be able to achieve that, but it will tie you to living with your mother as she ages. You say she's an "old pensioner" now, but she could have another 20-30 years in her - and her one-third-ownership will count towards paying for residential care if and when her health deteriorates to the point where she needs it.

davidmcn

m3ssy wrote: »

She owns 1/3rd of a property; the other 2/3 is owned by a ‘family’ member

The complication is the ‘family’ member who will ask for their 2/3 back due the second charge on the property.

Just to clarify - is it actually the case that your mother is the sole owner of the property, and this family member's only interest is the second charge over it?

dawyldthing

If she’s on pension credit guaranteed credit then that will get cut if she sold up as she would have capital. Plus she would have to pay rent which would eat £100k up quickly, especially down south.

Buy to let isn’t an easy option. There’s pitfalls if folk don’t look after the house, refuse to pay the rent etc. It isn’t for the faint hearted.

m3ssy

Thank you so much for your responses! To clarify some of the above:

My mother is the sole owner and the family member's interest is the second charge.
She is in her 70s so could indeed live another 20 years or so
I would truly love to have my independence and be free but having been thrown on the street in the late 90s with me as a child (no fault of her own,) and bounced back from that, i am not prepared to abandon her and will support as best i can!
In order to keep the current house 'going' i have had to spends £1000's on repairs and maintenance as she simply does not have the money to cover it and pay £500 'rent' + bills. I'm not living for free.
She is not living an extravagant lifestyle and bills/utilities are as low as they can go.

Cakeguts

£100k is not enough to buy a property in the north that will let without a lot of problems. House prices have gone up a lot recently.



https://www.rightmove.co.uk/property-for-sale/property-69947984.html This is just an example from Greater Manchester of the kind of price you can pay.



https://www.rightmove.co.uk/property-for-sale/property-69258187.html A flat with no parking.


A traditional terraced house https://www.rightmove.co.uk/property-for-sale/property-68028850.html


Here is an example of the 100s of properties available to let that are vacant right now.





What your mother really needs to do is to downsize into sheltered housing.

AdrianC

Cakeguts wrote: »

£100k is not enough to buy a property in the north that will let without a lot of problems.

It's more than enough to buy one that will in a lot of very decent places that aren't even "oop north".

https://www.rightmove.co.uk/property-for-sale/property-77907800.html

gettingtheresometime

Have you looked at the cost of renting a property where you are as I'm guessing that that would have cost more than you're paying in 'rent' to your mum now.

In all honesty I think you need to look at your life plans and see how they fit in with what your mum can financially manage as well as physically manage - for example even if you could afford to buy off the 2nd charge & get a place of your own, would your mum find it too big a place to manage? Would your mum want to go 'up north' ie does she know any one there?

As harsh as it sounds perhaps now is a good time to have that awkward conversation with her

BrassicWoman

“Allow my mum to sell up”? Her house her decision surely.

What does she want?