How to buy a house for son with disabilities

Alimsepie

Our money is mainly in our home.  We have about 40k in savings. Otherwise we live on our state pensions and a small income from airbnb.   We have 2 adult sons, one with autism who can’t work and is on PIP and ESA. His housing is very insecure and we have decided we would like to buy him a house nearer us and his brother.  The problem is the funding and also a way that ensures that our other son will have his inheritance in an equal sum when we die.  Can we get a mortgage? Could we buy another house using that sum? Is a vulnerable persons trust a good idea and what are the benefits? What will be the impact of inheritance tax and capital gains tax?  What happens if one of us or both has to go into care at a later stage? 

elsien

You have no guarantees about any money being passed down to your other son because you don’t know if you will need it yourself for your own care needs in the meantime. You also need to consider your own state of health and whether there is a reasonably foreseeable possibility that you may need care in the future because if you are in poor health then using your savings to buy your son a property could be seen as deliberate deprivation of assets.

There is nowhere near enough information in your post around affordability - for example, you haven’t said what type of sum you would need to borrow. Or what sort of property you are looking for. But if anything happens to either of you and there was still money owing on the mortgage, how do you plan for that to be paid? And after you have gone, will your son be able to afford bills and maintenance costs on a property while living off benefits?

What do you mean when you say his current housing is insecure?

Alimsepie

We are retired, so far in good health. We need about £170,000. Our joint annual income is £34,000.
We are looking for a house for him. He is currently in rental accommodation but has to move. We are thinking of equity release and selling up in a few years, paying it off, down sizing and moving nearer to both sons. Hope is when we die, there will be enough from sale of our home for other son and more to be split between them. I appreciate we can’t know if we need to pay for care or not

teaselMay

Have a look at shared ownership. My finances are similar, although UC rather than ESA and I managed to get a mortgage with Barclays a year ago to buy a 25% share in a house. UC pays the rent element on the other 75%. I had just under £6k deposit after frantically saving.

That way the mortgage would be in his name and your home stays secure. It is possible to buy a 10% share but very difficult to get a mortgage on a 10% share - but for example 10% of £200,000 is £20k, and so you could perhaps help him buy a 10% share without a mortgage and then still have some savings.

It's not a scheme without issues, you're fully responsible for maintenance as you would be with normal ownership for example even though you only own a proportion of the house, but it gives security.

Be wary of the shared ownership scheme aimed specifically at long term disabled people, it appeared no different to the normal scheme but with massive added overheads giving someone else a big profit.

Alimsepie

That’s an interesting, I will look into it. I am concerned about anything too complicated to deal with, also I did look before and couldn’t any properties in the areas we are thinking of. I will look again. thank you

Keep_pedalling

Whether this works out or not you do need to look at including a vulnerable persons trust in your wills. For this you need a solicitor who is a qualified in dealing in trusts (STEP).

https://www.step.org/about-step/public?utm_source=web&utm_medium=web%20&utm_campaign=Quick_acess_public_05032025&utm_id=Quick_acess_public

Alimsepie

Thank you. I have looked at them but their search directory is not very helpful for finding local practitioners. I am in the process of trying to see a solicitor who specialises in trusts.

elsien

How does your son feel about this, and the responsibilities around being a property owner?

Alimsepie

he doesn’t much like the idea of a trust and dealing with his business through other people, but we are finding out more about this. Otherwise he relies heavily on us to support him. Hopefully we will be around for a bit and long enough to plan what to do after we are gone.

ACG

I think you probably need to book an appointment with a solicitor and mortgage broker - potentially in the same meeting, maybe even an accountant/tax adviser.

The questions you have require more than one person to answer.

elsien

would he be willing to make a power-of-attorney so that either another family member/Friend or a solicitor could step in and help with the more complicated bits if he wanted them to if you are no longer able to ? With his consent of course.