Buying a house for a relative but owning in another name - options?

16confused

Thanks for all of the useful feedback. 
Summary of response:
My brother would have to pay all of the maintenance costs and everything else. The insurance we'd pay for and make sure we were the sole beneficiaries if there was any claim. That he would have relatively few outgoings would mean that these could be covered from a small wage or possibly unemployment benefits if he were out of work. His problem is not that he's stupid or can't save money (he's not wasteful) its that he's immature and has no work ethic and won't do any thing he doesn't want to do. As a consequence of this he's never managed to secure a decent long term job by which he can then secure a mortgage.  
I'm aware of the additional SDLT as a second home. This is an issue but the house would be relatively low value and so this wouldn't be too significant. The bigger concern would be if one of us wanted to move house and then had to pay the additional 3% SDLT on our new property.
Noted regarding it being considered an asset if my mum required social care. Presumably if she went in a home she could be forced to sell it to cover the costs?  
Changing her will to accommodate the new arrangements would be fairly straightforward. There could be complications/falling outs further down the line but if everything is in writing then hopefully it will work out. 
We did consider a BTL but I think its illegal to let out to a family member. I do know anecdotally that this does go on but not an option for us. 
We could consider charging rent or alternatively have some arrangement where, rather than paying rent, he pays us money every month until he eventually owns the place. This may then involve more paperwork or going on trust basis that we record each month how much he repays. The potential for a family fall out is there however we do it. 
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. She knows she's partly created the problem. He's moved out various times and come back when things haven't worked out. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 
He has also been in a string of bad relationships. Another concern is that if the house were in his name and he got himself into another one of these he could end up losing the house to them (they got married and then divorced and loses half the house) and he's be back to square one again.     
The trust idea sounds good. I'll look into this. Thanks for the links. 

Thanks all

[Deleted User]

16confused said:

Thanks for all of the useful feedback. 
Summary of response:
My brother would have to pay all of the maintenance costs and everything else. The insurance we'd pay for and make sure we were the sole beneficiaries if there was any claim. That he would have relatively few outgoings would mean that these could be covered from a small wage or possibly unemployment benefits if he were out of work. His problem is not that he's stupid or can't save money (he's not wasteful) its that he's immature and has no work ethic and won't do any thing he doesn't want to do. As a consequence of this he's never managed to secure a decent long term job by which he can then secure a mortgage.  
I'm aware of the additional SDLT as a second home. This is an issue but the house would be relatively low value and so this wouldn't be too significant. The bigger concern would be if one of us wanted to move house and then had to pay the additional 3% SDLT on our new property.
Noted regarding it being considered an asset if my mum required social care. Presumably if she went in a home she could be forced to sell it to cover the costs?  
Changing her will to accommodate the new arrangements would be fairly straightforward. There could be complications/falling outs further down the line but if everything is in writing then hopefully it will work out. 
We did consider a BTL but I think its illegal to let out to a family member. I do know anecdotally that this does go on but not an option for us. 
We could consider charging rent or alternatively have some arrangement where, rather than paying rent, he pays us money every month until he eventually owns the place. This may then involve more paperwork or going on trust basis that we record each month how much he repays. The potential for a family fall out is there however we do it. 
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. She knows she's partly created the problem. He's moved out various times and come back when things haven't worked out. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 
He has also been in a string of bad relationships. Another concern is that if the house were in his name and he got himself into another one of these he could end up losing the house to them (they got married and then divorced and loses half the house) and he's be back to square one again.     
The trust idea sounds good. I'll look into this. Thanks for the links. 

Thanks all

It’s not illegal to let to a family member. I said in my previous post that it can be done with a regulated BTL mortgage. 

If both you and your mum already own your own homes then you wouldn’t have to pay the higher rate of SDLT when purchasing a new home unless you decided to retain your current home as well as buying a new one. 

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810

lincroft1710

16confused said:

 he's immature and has no work ethic and won't do any thing he doesn't want to do.
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 

You do realise what you are doing don't you?

If you buy him a house he will have even less reason for a work ethic. If he's immature, this would hardly change that aspect and as he won't do anything he doesn't want to, that hardly bodes well for a well decorated and maintained house.

I think it's a sorry state if there are plenty of families out there in similar situations!

Sometimes you have to be seemingly cruel to be kind.

Mojisola

16confused said:

My brother would have to pay all of the maintenance costs and everything else.

With his history, do you really expect him to keep the house up to an acceptable standard and find the money to pay for repairs and maintenance?

16confused

Lover_of_Lycra said:

16confused said:

Thanks for all of the useful feedback. 
Summary of response:
My brother would have to pay all of the maintenance costs and everything else. The insurance we'd pay for and make sure we were the sole beneficiaries if there was any claim. That he would have relatively few outgoings would mean that these could be covered from a small wage or possibly unemployment benefits if he were out of work. His problem is not that he's stupid or can't save money (he's not wasteful) its that he's immature and has no work ethic and won't do any thing he doesn't want to do. As a consequence of this he's never managed to secure a decent long term job by which he can then secure a mortgage.  
I'm aware of the additional SDLT as a second home. This is an issue but the house would be relatively low value and so this wouldn't be too significant. The bigger concern would be if one of us wanted to move house and then had to pay the additional 3% SDLT on our new property.
Noted regarding it being considered an asset if my mum required social care. Presumably if she went in a home she could be forced to sell it to cover the costs?  
Changing her will to accommodate the new arrangements would be fairly straightforward. There could be complications/falling outs further down the line but if everything is in writing then hopefully it will work out. 
We did consider a BTL but I think its illegal to let out to a family member. I do know anecdotally that this does go on but not an option for us. 
We could consider charging rent or alternatively have some arrangement where, rather than paying rent, he pays us money every month until he eventually owns the place. This may then involve more paperwork or going on trust basis that we record each month how much he repays. The potential for a family fall out is there however we do it. 
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. She knows she's partly created the problem. He's moved out various times and come back when things haven't worked out. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 
He has also been in a string of bad relationships. Another concern is that if the house were in his name and he got himself into another one of these he could end up losing the house to them (they got married and then divorced and loses half the house) and he's be back to square one again.     
The trust idea sounds good. I'll look into this. Thanks for the links. 

Thanks all

It’s not illegal to let to a family member. I said in my previous post that it can be done with a regulated BTL mortgage. 

If both you and your mum already own your own homes then you wouldn’t have to pay the higher rate of SDLT when purchasing a new home unless you decided to retain your current home as well as buying a new one. 

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810

Via a regulated BTL mortgage we could let to a family member? Sorry I missed this in your previous post. Do all BTL lenders offer these or is it more of a niche? Can anyone recommend a lender that they have done this with previously?

Reading through the scenarios in the link I think we would be OK re the SDLT.
My girlfriend and I are buying a house together in the new year. Neither of us own any property currently. 
If I then bought a house for my brother later in 2020 I would have to pay the 3% SDLT surcharge.
If my girlfriend and I then decided to move our main residence in 2021 we would have to pay SDLT again but not any 3% surcharge. As I understand it we could also sell our main residence without immediately having to purchase a new main residence i.e. if we sold our main residence we wouldn't need to pay any CGT and could wait a period before buying our next home without incurring an additional charge i.e. if we wanted to avoid being in a chain.
If I bought a home for my brother and later sold it at a profit it would always be liable for CGT (this is not the intention off course). 
I can leave him in that house and move as many times as I like without paying the surcharge so long as I'm only moving between main residences. 
Please correct me if I've interpreted this wrongly. 
Thanks

   

16confused

lincroft1710 said:

16confused said:

 he's immature and has no work ethic and won't do any thing he doesn't want to do.
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 

You do realise what you are doing don't you?

If you buy him a house he will have even less reason for a work ethic. If he's immature, this would hardly change that aspect and as he won't do anything he doesn't want to, that hardly bodes well for a well decorated and maintained house.

I think it's a sorry state if there are plenty of families out there in similar situations!

Sometimes you have to be seemingly cruel to be kind.

I do realise but unfortunately this is what we're considering. Need to assess all options and work out what can be done and how to do it.  
It doesn't bode well but its going to be a fairly basic place anyway and he is very clean and tidy. I've no concerns about him damaging the place. Its keeping a job that is the issue for him.

16confused

Mojisola said:

16confused said:

My brother would have to pay all of the maintenance costs and everything else.

With his history, do you really expect him to keep the house up to an acceptable standard and find the money to pay for repairs and maintenance?

Quiet possibly not but its got to the stage where we'll consider all options. 

Angela_D_3

16confused said:

lincroft1710 said:

16confused said:

 he's immature and has no work ethic and won't do any thing he doesn't want to do.
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 

You do realise what you are doing don't you?

If you buy him a house he will have even less reason for a work ethic. If he's immature, this would hardly change that aspect and as he won't do anything he doesn't want to, that hardly bodes well for a well decorated and maintained house.

I think it's a sorry state if there are plenty of families out there in similar situations!

Sometimes you have to be seemingly cruel to be kind.

I do realise but unfortunately this is what we're considering. Need to assess all options and work out what can be done and how to do it.  
It doesn't bode well but its going to be a fairly basic place anyway and he is very clean and tidy. I've no concerns about him damaging the place. Its keeping a job that is the issue for him.

You’re removing the incentive for him to get a job.  I agree with the safety net,  if he needs to live with your mum short term after it’s gone pear shaped fair enough but long term buying him a house isn’t really helping. 

Now isn’t the time to criticise anyone being unemployed but going forward I do wonder if you’re doing him a disservice 

lincroft1710

16confused said:

lincroft1710 said:

16confused said:

 he's immature and has no work ethic and won't do any thing he doesn't want to do.
Regarding kicking him out so that he stands on his own two feet I think my mum would like to but can't bring herself to do it. I'm sure there are plenty of families out there in similar situations and I'm assuming this is becoming more common rather than less? 

You do realise what you are doing don't you?

If you buy him a house he will have even less reason for a work ethic. If he's immature, this would hardly change that aspect and as he won't do anything he doesn't want to, that hardly bodes well for a well decorated and maintained house.

I think it's a sorry state if there are plenty of families out there in similar situations!

Sometimes you have to be seemingly cruel to be kind.

I do realise but unfortunately this is what we're considering. Need to assess all options and work out what can be done and how to do it.  
It doesn't bode well but its going to be a fairly basic place anyway and he is very clean and tidy. I've no concerns about him damaging the place. Its keeping a job that is the issue for him.

Being clean and tidy and not causing damage may all be well and fine living with his mother who can tell him him not to do things. But if you are on your own with no-one to chastise you, standards can very easily slip, he may not be wilful but he could be neglectful.

You have no doubt heard of the phrase "Out of the frying pan into the fire". Well buying him a house will be for him "Out of 
the armchair into the bed". 

Look at it another way, why should you use your hard earned cash to provide for your shiftless, sponging brother? I'm all for helping and supporting family members, but basically he's got you and your mum wrapped around his little finger. 

16confused

These are good points and its quite possible that we won't go through with it. However, it is worth exploring the different options. 
On a positive note I've spoken to two mortgage brokers who have suggested different options re a BTL mortgage/alternative options. It seems these may be possible. I'd previously looked into this and found it wasn't possible to let to a family member but it is. The difference is that it will be based on my, and/or my mum's ability to cover the monthly mortgage payments.  
Thanks to the poster who pointed this option out. 

The risks remain the same but that if he doesn't pay us back. However a benefit would be that we could borrow some of the money relatively cheaply. If he didn't pay his share of the rent and/or mortgage then we'd have to evict him which would severely damage the relationship but its strained anyway and so that wouldn't make too much difference. 
Once he's out of my mum's she could downsize to something smaller (she's been considering this anyway as she gets older) and so there is no way back for him to live with her so either he knuckles down and works or we evict him (I would have to as my mum wouldn't) and he goes wherever he can.