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Buying Father-in-law's flat under right to buy

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  • silvercar
    silvercar Posts: 46,965 Ambassador
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    He can buy it using money you give or loan him.

    The danger is that it may need to be sold to pay for his care, if he requires residential care. He could also mortgage it in the future eg equity release to improve his own standard of living.

    The only mortgage you can get on the home you live in is a residential mortgage, that would be based on your income. If that isn't enough to raise the mortgage you have a problem. If the value is really low then a secured loan is a possibility, but the rates and repayments are higher.
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  • karcher
    karcher Posts: 2,069 Forumite
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    Eastender wrote: »
    Hi Folks,

    He lives alone and quite elderly, he is keen for his daughter, my wife, to have the Council property, after he passes away or goes to sheltered housing. None of us live in his flat. My question is as follows.

    1. Can we buy it for him, can we show our name on the Title deeds or does it have to be a will?

    2. We would have to remortgage our house, as he won't get a mortgage and buy it on his behalf. We don't have a mortgage anymore on our house. When we do get a mortgage, would that be 'buy to let' type, but we won't be renting it straight away, as he would be living there. We're unable to get another mortgage based on income as we don't earn high salary to get the mortgage.

    And therein lies the atrocity that was/is Right to Buy.

    :(
    'I'm sinking in the quicksand of my thought
    And I ain't got the power anymore'
  • tealady
    tealady Posts: 3,744 Forumite
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    OP there are several problems I can think of.
    1) What are the Council rules regarding Right To Buty. Does the tenant have to prove they have the funds eg mortgage. If the money will be from you will that be acceptable to them
    2) Will your lender advance you the money and at what rate?
    3) If you can borrow the money can you put you name on the deeds. Will you be a tenant in common.
    4) If your or your wifes name go on the deeds will that be classed as a "sale" to another person, Councils rules may not allow this to happen for a fixed time.
    5) If you lend your FIL the money to buy the flat what happens if you need it back and he can't pay you?
    6) What would happen if your FIL died shortly after purchase. Do the Council have 1st refusal to buy the flat back?
    7) Do you know if the block has any building works programmed. As an owner you will have to pay a share of these.

    Buying a property for someone else can be complicated. I am sure others will know far more about this topic than me so I would suggest you have a good read of other threads on this topic.
    Find out who you are and do that on purpose (thanks to Owain Wyn Jones quoting Dolly Parton)
  • charlieismydarling
    charlieismydarling Posts: 253 Forumite
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    Does your father in law not know that the flat is not actually his to pass to his daughter. If he buys it with your money he won't get sheltered housing if he needs it.

    Or does he want his cake and eat it?
  • Amara
    Amara Posts: 2,172 Forumite
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    ScorpiondeRooftrouser wrote: »
    Because there's a difference between "some time" and "forever".

    If you still have problems with this concept, which I realise is very complicated, just wait 30 years. Then after that, wait forever. You'll see the difference.
    If council house is bought, council can use money from sale to build new one. Within 30 or whatever years house's condition undoubtedly will deteriorate, cost of repairs increase. Is it really better option to wait 30 years, until tenant dies and council house will come to stock, rather then sell it and build a new one?
  • katebl
    katebl Posts: 637 Forumite
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    Amara wrote: »
    If council house is bought, council can use money from sale to build new one. Within 30 or whatever years house's condition undoubtedly will deteriorate, cost of repairs increase. Is it really better option to wait 30 years, until tenant dies and council house will come to stock, rather then sell it and build a new one?

    I'm quite sure the money goes to central government rather than back to the individual council unfortunately so the whole "replacing sold stock" is a bit more difficult than it seems
  • lincroft1710
    lincroft1710 Posts: 17,646 Forumite
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    The money obtained from the sale of a council property would not be enough to build a new one. A council would have to sell off a lot of property to fund building new stock.
    If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
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    Amara wrote: »
    If council house is bought, council can use money from sale to build new one. Within 30 or whatever years house's condition undoubtedly will deteriorate, cost of repairs increase. Is it really better option to wait 30 years, until tenant dies and council house will come to stock, rather then sell it and build a new one?

    It can if the land can be found to build it on. Sometimes it is better to replace the old stock with new so that requires demolishing it and rebuilding in the same place.
  • ScorpiondeRooftrouser
    ScorpiondeRooftrouser Posts: 2,851 Forumite
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    Amara wrote: »
    If council house is bought, council can use money from sale to build new one. Within 30 or whatever years house's condition undoubtedly will deteriorate, cost of repairs increase. Is it really better option to wait 30 years, until tenant dies and council house will come to stock, rather then sell it and build a new one?

    http://www.insidehousing.co.uk/treasury-grabs-358m-of-right-to-buy-receipts/7007621.article#
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