PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Mum and Dad’s house & building a granny flat

My mum and dad are 67 & 65, both nearing retirement. 

They live in a large semi detached house, worth approx 300k. They have 150k outstanding, roughy on interest only. They do not have the funds to pay this off when the deal ends in 2 years. 

We are thinking of buying their property and considering whether we could convert the garage at the side into a granny annex for them to live in. 

My dad owns his own building company so could potentially do the work over the next couple of years before selling to us. 

We would then buy at market value,  own the property and they would keep the equity for retirement fund, as well as their state / work pensions. 

With the money we make in selling our own house, we would build a large rear extension onto the house (it is on a large corner plot with big garden) 

Is this a feesable idea? I understand there would be planning permission etc. involved. 

What other implications may there be in terms of parents living with us? 
«1

Comments

  • Ellalou
    Ellalou Posts: 70 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    My parents have 60-70k in savings just now that they could use to start the project 
  • Herzlos
    Herzlos Posts: 15,584 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Who's going to be paying to build the annex? How would that compare to buying a pre-built flat somewhere locally?
  • BJV
    BJV Posts: 2,535 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 20 July 2023 at 10:51AM
    I think it sounds amazing and it would be nice to have them close so you can support them as they get older. I would just check planning 1st. Get all the plans drawn up, get them passed and then make a final decision. But good luck sounds fantastic if you can do it why not ?

    Ref tax and pension implications I honestly don't know but someone will be here soon to help.
    Happiness, Health and Wealth in that order please!:A
  • Ellalou
    Ellalou Posts: 70 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    Herzlos said:
    Who's going to be paying to build the annex? How would that compare to buying a pre-built flat somewhere locally?
    Sorry I forgot to say that in the original message. My parents would. They have 60-70k in savings at the moment. My dad is also a builder so we were thinking over the 2 years they have left on their interest only deal they could build. The 2 years would also allow for us fo save money to put into the house, as well as the equity we make on our house when we sell. We stay on the same street but in a mid terrace. Lovely house but we don’t have the flexibility to extend like they do to their house. 

    We could potentially make £100k in equity so could put down a good deposit when we buy and also have money to extend. 
  • Ellalou
    Ellalou Posts: 70 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    Herzlos said:
    Who's going to be paying to build the annex? How would that compare to buying a pre-built flat somewhere locally?
    To downside locally they would need about £130k. They love the area / street we stay in and really want to either somehow keep the house or sell to family 
  • gwynlas
    gwynlas Posts: 2,145 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    There are a lot of things to consider before becoming a multi generation household. What happens if you and your partner split up, you die and your partner wishes to remarry etc? That is without thinking of the effects of aging and the needs of care in the future. Are there other siblings who would miss out on inheritance or who would forego helping with caring as you live there. If you are all happy having had full and frank discussions then go ahead.
  • BJV
    BJV Posts: 2,535 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 20 July 2023 at 11:01AM
    If your dad is a builder then OMG why not.

    If you can financially do it go for it.

    The biggest part of any build is labour. I know I have just had a kitchen extension and wow made a massive difference but OMG the labour costs where astronomical. !

    But again I stress get the plans passed and then talk it over with your parents. 

    Do you have any siblings ? If so how do they feel about it ?
    Happiness, Health and Wealth in that order please!:A
  • Ellalou
    Ellalou Posts: 70 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    BJV said:
    If your dad is a builder then OMG why not.

    If you can financially do it go for it.

    The biggest part of any build is labour. I know I have just had a kitchen extension and wow made a massive difference but OMG the labour costs where astronomical. !

    But again I stress get the plans passed and then talk it over with your parents. 

    Do you have any siblings ? If so how do they feel about it ?
    Yes labour costs are the most! Dad would need to work on it part time, as well as do his  own work! 
    We have an architect my dad knows who would draw up plans, he has done many jobs with him. 

    I have 3 other siblings, the main thing we want is our parents to be settled and not have a mortgage to pay. It has been a worry thinking if they will need to sell up and move out of the area. Obviously we would all need to discuss further but initial thoughts were that it would make mum and dad settled and happy and we wouldn’t need to worry about supporting them financially 
  • badger09
    badger09 Posts: 11,495 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What do your parents think about this idea?
    Do they want to downsize from a large semi to a converted garage? (I know I wouldn’t) 
    As you all live on the same street, there is no obvious benefit, in terms of them possibly needing more support from you in the future. 
    Have you considered buying each other’s houses, effectively doing a house swap? Obviously you’d have to do this legally, but it could solve their problem of the looming £150k mortgage repayment 

  • Ellalou
    Ellalou Posts: 70 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    badger09 said:
    What do your parents think about this idea?
    Do they want to downsize from a large semi to a converted garage? (I know I wouldn’t) 
    As you all live on the same street, there is no obvious benefit, in terms of them possibly needing more support from you in the future. 
    Have you considered buying each other’s houses, effectively doing a house swap? Obviously you’d have to do this legally, but it could solve their problem of the looming £150k mortgage repayment 

    We have thought of this but it would mean they would need a mortgage. At their age and with going into retirement it would be difficult due to affordability etc. 

    We also want to sort something so that they don’t have a mortgage payment to worry about. 
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 349.8K Banking & Borrowing
  • 252.6K Reduce Debt & Boost Income
  • 453K Spending & Discounts
  • 242.8K Work, Benefits & Business
  • 619.6K Mortgages, Homes & Bills
  • 176.4K Life & Family
  • 255.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.