My parents downsizing dilemma..

yopeebee

Hi...

I'm just seeing if this a viable option for our family. I'm looking at possibly buying my parents house. 

So, I'm in my 40s as is my sister, with or own families and mortgages. We are looking alfor some advice. The house we grew up in, as well as in a state of disrepair, to which we can't afford to fix is also much to big for our  parents. There are leaks in the roof, the kitchen needs a complete rip out as does the bathroom. The boiler is working but in the last few qmonths has been playing up. My father has ms and as he's 70 is finding it very difficult to walk up the stairs, use the shower and toilet. They are both retired, but my dad claims ESA. My mum, is 75 and although can still move about, has cartilidge issues with her right knee, again finding it difficult to use the shower.... Also, with the current crisis with everything going up we are worried about them struggling over the coming months. 

My sister and I brought up the subject of our worries and we suggested they sell up (house is paid up) and maybe get a council bungalow. My dad thinks it's a good idea, my mother doesn't want to discuss it.. she wants someone to come in and fix it all... But is embarrassed by how the state of it is, and so, doesn't let anyone in..

So, I'm after any help see... On the one hand my parents sell the house , if they did, how would getting a council property be viable, as we've heard stories about councils taking a large amount of the monies to pay for the council bungalow.. my dad's on benefits so, I'd assume that would cover rent and council tax, but would they be able to take away the monies from the house? How would we be able to get them into a bungalow, or even sheltered accommodation?...

On the other hand, could my sister and I buy my parents property.. it is in a good area.. is it viable to get a mortgage on the property.. (we both currently have our own mortgages for our own houses).. borrow some money back from the sale of the house to do up and improve and then sell on?... In which case, is there a buy to sell mortgage available to us for this type of thing?...  The current expected value of houses on the street is around 220k.. so with the faults and work that needs doing we have assumed it'll be about 160k as it is now... 

Thanks, and any advice/help would be gratefully received..

HampshireH

Ok.

So they won't be eligible for a council bungalow as they will have the cash from their house and could afford accommodation. Social housing lists don't allow applicants a high amount of cash in the bank.

Unless they meet the criteria in your area for sheltered housing. This is an option. You would need to speak to the council housing options team.

In terms of benefits I'm not sure how being cash rich would impact them for general benefits as elderly (are their benefits means tested?) but the rent won't be paid nor will the council tax if they have money to pay for it themselves.

If they are selling, won't they have money to downsize and buy a bungalow?

Have they paid off their mortgage? How much would they have if they sold?

diystarter7

Not sure which part of the uk you are in but most parts of the se England coucil property has massive waiting lists. a sheltered home or an extra care home may be an option, call the council tomorrow.

you and sis buying it, there is a recognised market value and the tax man, coucil etc may all be interested in it if sold below the true value.
 the assume value is not good enough you need  a valauation and EA's often give free valautions, ujust say the parents are wanting to sell it and ask for three prices EG, quick sale, mid-speed sale or sell to anyone that is in a chain etc.

From what you are saying im your parents will be better off/safer in a shelter home or extra care home via council or private sector but contact the coucil they have all the details.

btw - you both could buy if you had the assests to cover the risks in the lender's eyes.

Richiem1987

I would get it Surveyed first and foremost, to see if it's likely to be able to get a Mortgage on it before applying for one. If you have the cash between you to buy it outright and do it up, it maybe worth it, otherwise a lender may not lend on it in its current state and significant work maybe required to get it to a point where you could get a Mortgage on it. 

Markneath

They would probably be lucky to find a private rental let alone a council one.

Council/HA stock is very limited and in demand, private rentals are also pretty hard to come by in most areas. 

If they don’t have savings could they do equity release to pay towards the house repairs?

The roof might need minor repairs its not always a case of a new roof. 

Tiglet2

If your parents own their own home outright, would they even qualify for a council property?  
The easiest solution as far as I see it, would be for your parents to sell their home (advertise it at a good price for a renovation/diy project) and buy something smaller with the proceeds - hopefully some monies left over too.

If you/your sister buy it, then you would have to pay the higher rate stamp duty as it would be a second property.  Then if you do it up and sell at a profit, you would be liable for Capital Gains Tax (albeit you would get £12,300 p.a. allowance each).

marcia_

 Benefits might be affected if not using the money to buy a new home. 

 Post on the benefits board for advice re benefits 

yopeebee

diystarter7 said:

Not sure which part of the uk you are in but most parts of the se England coucil property has massive waiting lists. a sheltered home or an extra care home may be an option, call the council tomorrow.

you and sis buying it, there is a recognised market value and the tax man, coucil etc may all be interested in it if sold below the true value.
 the assume value is not good enough you need  a valauation and EA's often give free valautions, ujust say the parents are wanting to sell it and ask for three prices EG, quick sale, mid-speed sale or sell to anyone that is in a chain etc.

From what you are saying im your parents will be better off/safer in a shelter home or extra care home via council or private sector but contact the coucil they have all the details.

btw - you both could buy if you had the assests to cover the risks in the lender's eyes.

Thanks for your reply...me and our kid haven't got the money outright to buy it... It would be on a mortgage... And that's the dilemma, we already have mortgages to pay, so would a lender be willing to set us up with another mortgage to buy the property to sell on?...

yopeebee

diystarter7 said:

Not sure which part of the uk you are in but most parts of the se England coucil property has massive waiting lists. a sheltered home or an extra care home may be an option, call the council tomorrow.

you and sis buying it, there is a recognised market value and the tax man, coucil etc may all be interested in it if sold below the true value.
 the assume value is not good enough you need  a valauation and EA's often give free valautions, ujust say the parents are wanting to sell it and ask for three prices EG, quick sale, mid-speed sale or sell to anyone that is in a chain etc.

From what you are saying im your parents will be better off/safer in a shelter home or extra care home via council or private sector but contact the coucil they have all the details.

btw - you both could buy if you had the assests to cover the risks in the lender's eyes.

We're in greater Manchester... 

diystarter7

yopeebee said:

diystarter7 said:

Not sure which part of the uk you are in but most parts of the se England coucil property has massive waiting lists. a sheltered home or an extra care home may be an option, call the council tomorrow.

you and sis buying it, there is a recognised market value and the tax man, coucil etc may all be interested in it if sold below the true value.
 the assume value is not good enough you need  a valauation and EA's often give free valautions, ujust say the parents are wanting to sell it and ask for three prices EG, quick sale, mid-speed sale or sell to anyone that is in a chain etc.

From what you are saying im your parents will be better off/safer in a shelter home or extra care home via council or private sector but contact the coucil they have all the details.

btw - you both could buy if you had the assests to cover the risks in the lender's eyes.

Thanks for your reply...me and our kid haven't got the money outright to buy it... It would be on a mortgage... And that's the dilemma, we already have mortgages to pay, so would a lender be willing to set us up with another mortgage to buy the property to sell on?...

as i said, the lender would give you the money as long as their money was covered eg your, your kids property minus mortgage payments and fire sale value and if you could, have the income to make payments. shop around and test the water

elsien

Councils do not take money off people for social housing, other than for the rent so I’m not sure why you think that they’d be after any equity from your parent’s property. That’s just wrong.
In normal circumstances they would have very low eligibility as they are already housed however due to your father’s medical needs they may not automatically be ruled out. Friend of mine sold her own house and moved into an over 50s flat. 

Their first port of call should be to speak to your housing options team to clarify firstly if they would be eligible, and secondly what their priority/wait time might realistically be. 

Are you sure it’s ESA your dad is getting as that stops at state pension age?