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Smousie

Right To Buy Question

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I am currently living with my elderly mother and looking for an affordable house to buy. My mother has been a council tenant for thirty years, and I pay rent to the council while I'm living with her. Mum has suggested that she should apply to buy her house under the Right to Buy scheme, and I could pay the mortgage. While I don't have any objections about continuing to live with her, I am worried that I'd be throwing my money away.

The problem is this: even if I pay the mortgage, Mum will still be the sole owner of the house, so I'm effectively paying for a house I don't own. If Mum gets ill and has to go in a nursing home, I assume the government would take the house (which I paid for) and sell it to pay for her care. So it doesn't seem like a good idea for me to invest my money in a house which could be taken away from me. I think I'd be better off buying a house elsewhere and taking Mum to live with me, so at least it's my house and I won't lose my investment if she has to go into care.

Mum insists she would prefer to stay in her own home, and she doesn't see why I can't just buy her house rather than a different one. Am I correct in thinking that buying her house would be a very bad idea?

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I am currently living with my elderly mother and looking for an affordable house to buy. My mother has been a council tenant for thirty years, and I pay rent to the council while I'm living with her. Mum has suggested that she should apply to buy her house under the Right to Buy scheme, and I could pay the mortgage. While I don't have any objections about continuing to live with her, I am worried that I'd be throwing my money away.

The problem is this: even if I pay the mortgage, Mum will still be the sole owner of the house, so I'm effectively paying for a house I don't own. If Mum gets ill and has to go in a nursing home, I assume the government would take the house (which I paid for) and sell it to pay for her care. So it doesn't seem like a good idea for me to invest my money in a house which could be taken away from me. I think I'd be better off buying a house elsewhere and taking Mum to live with me, so at least it's my house and I won't lose my investment if she has to go into care.

Mum insists she would prefer to stay in her own home, and she doesn't see why I can't just buy her house rather than a different one. Am I correct in thinking that buying her house would be a very bad idea?

No.

It's only a bad idea if she goes into care for long enough to spend all the residual value in the property.

And how likely is that?

And even if it does happen, all you will be losing is the "discount", as you wont have paid any of it off in the first couple of years.

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No.

It's only a bad idea if she goes into care for long enough to spend all the residual value in the property.

And how likely is that?

And even if it does happen, all you will be losing is the "discount", as you wont have paid any of it off in the first couple of years.

I would lose every penny I'd paid off the mortgage so far, plus my deposit.

Let's say the house is worth 100k, and Mum gets 10k discount, so the house price is 90k. I put down the 5k deposit I've saved and get an 85k mortgage, then I pay £500 a month off the mortgage. Next year Mum goes in a home and the council takes the house (because she owns it), sells it for 100k, pays off the mortgage and has about 15k left.

At this point I have spent 5k deposit, plus £500 a month for a year which is another 6k. For my investment of 11k I get absolutely nothing, plus I'm homeless. I could have invested that 11k into buying a different house which I own, then bring Mum to live with me, and I'd still have a roof over my head even if Mum has to go into a home. The longer I'm paying the mortgage on a house that Mum owns, the more money I'm throwing down the drain if Mum does eventually need to go into care.

Mum seems to think she can buy her house and then transfer ownership to me because I'm paying the mortgage, but I'm not convinced that's possible. Unfortunately she is adamant that she isn't going to leave her home and move into another house with me, and it doesn't seem sensible for me to invest my money into a house that she owns!

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I would lose every penny I'd paid off the mortgage so far, plus my deposit.

You can protect the deposit by "lending" it to your mum (it is, after all, she who is buying the house). The LA then can't take that part of the house to pay for care as it isn't your mum's equity.

As to whether you regard the repayments as lost is up to you. These will be payments in lieu of rent which you would have paid (and lost) instead

tim

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As to whether you regard the repayments as lost is up to you. These will be payments in lieu of rent which you would have paid (and lost) instead

Yeah, but my point is that I could make those repayments on another house instead (one that I own), and I could be on the housing ladder and not lose the money. Over a number of years it adds up to a sizeable chunk of cash that I would lose. The repayments would cost a lot more than the rent does; if I'm not going to own the house at the end of it then I might as well just continue renting as it's cheaper.

Edited by Smousie

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Is your "elderly" mother still working?

If not how would she be able to obtain a mortgage for the required £85 K.

Far better for you OP to get your name on the tenancy. Then when eventually your mum passes on you have a home for life at a reasonable cost per week which is what the majority of this sites users would aspire to.

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If you're paying the mortgage you can argue a beneficial interest in the property, especially if your mum agrees to it - but I don't know if state seizure for care costs would trump that interest.

Research placing a charge on the property with your mum's consent after she's taken out the mortgage. That should keep the state's paws off because you have strict priority after the mortgage lender. But then there might be tax implications for your mum.

ps. I guess you're not paying council tax, which is another consideration.

Edited by okaycuckoo

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Mum is a disabled pensioner aged 68, so she doesn't work, and therefore she can't get a mortgage by herself. I want to buy a home for both of us so we have some security; Mum will live with me for the rest of her life, and then I'll continue living in the same house alone.

The way that Right to Buy works is that only the tenant (i.e. Mum) will own the house, but anyone who lives with her can share the mortgage (although in practice I'd be the only one paying it). So I could pay the mortgage but she'd own the house. This seems like a very bad idea to me. If I bought another house instead, Mum could still live with me, but when she passes away I wouldn't lose the house. But Mum refuses to move; she wants be to purchase her house.

Also I do have to pay council tax; as a pensioner Mum is exempt, but I am not. This is true regardless of whether I/we own the house that we live in or whether we rent.

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Also I do have to pay council tax; as a pensioner Mum is exempt, but I am not. This is true regardless of whether I/we own the house that we live in or whether we rent.

Pensioners are not exempt from CT, they get (or not) a means-tested "benefit" that pays it.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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