Assisting son to buy property

misterthrifty

Hi, just hoping to get some general advice on helping my partners son to buy his first property.
He has autism and we think he would live independently with our support. He works full time, his income is low (£12k ish). We are looking at a property for around £180k, he has savings to put in but we would be paying a substantial part of it.
He wouldn't be able to borrow sufficient funds & we don't want to burden him with high repayments, so we think we would prefer to borrow against our house (around £400k with existing mortgage of £25k). We are 62 & 55 and we have sufficient income for the loans but we are not able to demonstrate a good pension when we retire as we have substantial savings not in a pension plan that will provide a good income.
Questions, is it best for us to buy the property in his name. He can be naive about money & property and we want to have a degree of control, but we want him to have a secure future?
Alternatively, we could buy the property & rent it to him, in which case he may be entitled to some benefits.
Are we likely to get a mortgage against our property, we would prefer interest only as we have capital to pay it off eventually, maybe an offset mortgage?
Any advice appreciated, it seems like there are lots of things to consider and we are looking for a plan to follow at this stage.
TIA

diggingdude

misterthrifty wrote: »

Hi, just hoping to get some general advice on helping my partners son to buy his first property.
He has autism and we think he would live independently with our support. He works full time, his income is low (£12k ish). We are looking at a property for around £180k, he has savings to put in but we would be paying a substantial part of it.
He wouldn't be able to borrow sufficient funds & we don't want to burden him with high repayments, so we think we would prefer to borrow against our house (around £400k with existing mortgage of £25k). We are 62 & 55 and we have sufficient income for the loans but we are not able to demonstrate a good pension when we retire as we have substantial savings not in a pension plan that will provide a good income.
Questions, is it best for us to buy the property in his name. He can be naive about money & property and we want to have a degree of control, but we want him to have a secure future?
Alternatively, we could buy the property & rent it to him, in which case he may be entitled to some benefits.
Are we likely to get a mortgage against our property, we would prefer interest only as we have capital to pay it off eventually, maybe an offset mortgage?
Any advice appreciated, it seems like there are lots of things to consider and we are looking for a plan to follow at this stage.
TIA

he wont be able to claim housing benefit if he rents it and you will pay more stamp duty. someone more knowledgeable than me will be along soon

tacpot12

diggingdude is right about the fact that he probably won't be able to get help with his rent if he rents a property from you. There are rules about contrived tenancies, and even if the situation isn't contrived, the benefits system can make things very difficult. (See https://www.rla.org.uk/landlord/guides/payment_of_housing_benefit_where_landlord_and_tenant_are_related.shtml)

In reading your post, the one thing I don't understand is how you are going to pay off an interest-only mortgage in the future. Surely if you have the money now to pay off the mortgage, why would you borrow the money any pay interest to do so?

If the plan is to downsize your own property, do it now while you can face the upheaval of moving house.

getmore4less

a trust may be something to look at

https://advisingfamilies.org/information-portal/caring-for-others/disabled-persons-trust/

Nebulous2

getmore4less wrote: »

a trust may be something to look at

https://advisingfamilies.org/information-portal/caring-for-others/disabled-persons-trust/

Definitely investigate this. There is a lot of help out there for families in your situation. It can ring fence property as well, if he needs support once you've gone a trust can make it much more difficult for social services to move him out and sell the flat.

I've a friend whose brother has autism. Their parents (both now dead) set him up in a flat, which he owns and he regularly and repeatedly gets himself in financial problems - ordering new windows, very expensive sky tv packages etc. Then he doesn't tell his sister until it is too late to withdraw and she has to bail him out. He doesn't do it intentionally, he's just very vulnerable to sales pressure. If she had some control over his assets, as a trustee, it would be a grest help.

misterthrifty

Thanks for the replies. I will look into putting the property into trust for him, though my first thought is that it looks quite complex to administer and we will not have any tax benefits as there will be no income or capital gains in the trust.

Nebulous2, you say there is a lot of help available, though we have contacted the large autism charities and we have been unable to get any advice on the best way to proceed. We are not sure of the best way to arrange the purchase but the mortgage advisers say they need to know this before they can look for a mortgage. They suggest that we instruct a solicitor to look into this for us but I think that will be quite expensive.

Poppy_Pie

I don’t know about the rest, but I don’t see any reason that he wouldn’t be entitled to financial help with rent on an income of 12k. Housing benefit etc can be paid to a close relative so long as everything is done by the book and said family member doesn’t reside at the property in question.

I believe universal credit can also help pay towards mortgage interest, so that might be worth looking in to if he’s going to be responsible for paying the mortgage.