Gifting a deposit for a shared ownership property

BPL_Belle

I'm retiring soon & would like to gift a sum of money to a relative in order for her to be able to improve her housing situation. She claims universal credit & receives PIP due to a significant health issue which currently prevents her from working.  

She rents a 1 bed flat privately, but this is not well maintained.  I have looked at shared ownership properties (new or preowned), and could manage to cover what would normally be the mortgaged element on a 2 bed house with the smaller percentage arrangement, eg. 25%. She would then own that portion & pay rent on the remainder, assuming that the property provider accepts such an arrangement, ie. The gift covering both the initial deposit and then the balance of the 25%.

I understand that she still needs to go through an affordability assessment with the property provider (my reckoning is that the rental element + insurance still comes in below her current private rent). I've also read up on the rules of these schemes and believe that benefit claimants are not ruled out, but she would not be able to get a mortgage herself. 

My main question is does this qualify as a gifted deposit and therefore 'above board'? Also, am I correct to not expect a problem with the benefits side, except perhaps the housing element will be reduced in line with the smaller rent she'd actually pay in this situation.

I'd be very grateful for another view,  not wanting to start a process that can't be finished and/or has other consequences. Her health is the most important matter and this is what I'm trying to support. 

user1977

I suspect this depends on what the housing association's criteria are. A buyer who has the full 25% in cash (even if that's a gift) might be treated as having excessive means compared with a buyer who needs to have a mortgage.

housebuyer143

You couldn't buy it for her, so if you are giving her the 25% deposit then providing the provider is happy with this and she can afford the repayments with money to spare, then it should be fine. 
When my sister bought SO they wanted her to have £300 a month free after all bills. They will go a budget check.  UC will pay the rent element if she qualifies.

As the above poster says, it's down to the HA. When my sister bought it was on a first come basis, so you put down your name and then they came to you first. You met their criteria and you got it. It didn't matter if you were in a worse or better situation than someone else down the list. My sister bought with £100k inheritance and no mortgage and they didn't have any issues with this. Even with a £100k deposit, they couldn't afford a 3 bed house outside this scheme because where she is they are closer to £300k and the bank would only lend them £120k.

Remember though she will be responsible for 100% of the repair costs so if money is tight then this may burden her, not free her.

Brie

Seems like a nice thing to do, assuming you have lots of money to support yourself.  Should you at some point need support from the local authority for care costs they may look to your relative to pay them as they would have deemed you had purposely deprived yourself of assets.  This may not be a big problem ultimately but could be that the LA would put a lien on her SO property so they could get their money when she eventually sells it.  

Also I expect that you will need to provide a letter stating that the money is a gift to the solicitor handling the purchase to say that you have no claim on the property.  

BPL_Belle

Thanks everyone for the quick responses, much appreciated. I've just got to find a property at the right price to make an approach - not easy anywhere in the country, not even the cheaper end. I have noticed new builds are more recently offering 40-50% SO which is not an option.