Purchasing Mothers Council House
Discussion
RaymondVanDerDon said:
I work for a HA and we have a standard Right to Buy form which asks questions designed to ensure applicaitons are within the rules, which aren't the clearest - we regularly use solicitors as a double check.
It could appear to a cynic that your plan may be to buy the house, sell it, move your mother into a cheaper house and pocket the difference. The Council may ask probing questions about this (given her age) but I don't think there's any thing they can do about it.
There's no harm in making an application as worst case scenario is it gets rejected - only risk is if she is on any form of benefit - if so be doubly confident you're compliant with the rules as any suspicion of foul play could result in a referral to the Council's fraud investigation team.
Thanks.It could appear to a cynic that your plan may be to buy the house, sell it, move your mother into a cheaper house and pocket the difference. The Council may ask probing questions about this (given her age) but I don't think there's any thing they can do about it.
There's no harm in making an application as worst case scenario is it gets rejected - only risk is if she is on any form of benefit - if so be doubly confident you're compliant with the rules as any suspicion of foul play could result in a referral to the Council's fraud investigation team.
She is not on any benefits and pays the full monthly rent for the house, has her own state pension and my late fathers pension. Not trying to carry out a scam and get a quick buck. She doesn't want to move from this house hence the thoughts of buying it. If she was to move to a smaller council house the likelihood is she will be placed in a one bedroom flat / house with drug users, wasters as neighbours.
What was once old age accommodation around our area has become a den of delinquents where the old don't know who will be staying next door to them.
Whilst sir whatever has a chip on his shoulder re council houses being sold I have a chip on my shoulder that councils don't care who is living where.
Not somewhere my mother wants to go, nor somewhere I will let her go.
Selfish maybe.
tighnamara said:
Thanks.
She is not on any benefits and pays the full monthly rent for the house, has her own state pension and my late fathers pension. Not trying to carry out a scam and get a quick buck. She doesn't want to move from this house hence the thoughts of buying it. If she was to move to a smaller council house the likelihood is she will be placed in a one bedroom flat / house with drug users, wasters as neighbours.
What was once old age accommodation around our area has become a den of delinquents where the old don't know who will be staying next door to them.
Whilst sir whatever has a chip on his shoulder re council houses being sold I have a chip on my shoulder that councils don't care who is living where.
Not somewhere my mother wants to go, nor somewhere I will let her go.
Selfish maybe.
I'm afraid I don't believe in the right to buy, worst thing that has ever happened the housing market. I also strongly believe that your Mum has no right to stay in a 3 bedroom house when there are young families crying out for houses. However what the councils forgot to do was build 1 bedroom houses! As you say if she gave up the house then she would end up in a 1 bedroom flat in some sShe is not on any benefits and pays the full monthly rent for the house, has her own state pension and my late fathers pension. Not trying to carry out a scam and get a quick buck. She doesn't want to move from this house hence the thoughts of buying it. If she was to move to a smaller council house the likelihood is she will be placed in a one bedroom flat / house with drug users, wasters as neighbours.
What was once old age accommodation around our area has become a den of delinquents where the old don't know who will be staying next door to them.
Whilst sir whatever has a chip on his shoulder re council houses being sold I have a chip on my shoulder that councils don't care who is living where.
Not somewhere my mother wants to go, nor somewhere I will let her go.
Selfish maybe.
thole and she doesn't deserve that. What council around the land should be doing is building some nice 1 bedroom flats, warden controlled, so these OAPs can give up their current houses to more deserving families but they can also move to some nice accommodation. Sir Bagalot said:
I'm afraid I don't believe in the right to buy, worst thing that has ever happened the housing market. I also strongly believe that your Mum has no right to stay in a 3 bedroom house when there are young families crying out for houses. However what the councils forgot to do was build 1 bedroom houses! As you say if she gave up the house then she would end up in a 1 bedroom flat in some sthole and she doesn't deserve that. What council around the land should be doing is building some nice 1 bedroom flats, warden controlled, so these OAPs can give up their current houses to more deserving families but they can also move to some nice accommodation.
Fair comment.thole and she doesn't deserve that. What council around the land should be doing is building some nice 1 bedroom flats, warden controlled, so these OAPs can give up their current houses to more deserving families but they can also move to some nice accommodation. I tend to agree with you on council house purchases but the time has come to be a bit selfish.
New houses have been built in our area, very nice and eco friendly, they have filled these up with the unemployed(able) and drug users. Already I have heard of work being required to these due to these people not respecting the propert they have been given.
Whilst I am all for helping these people there a large percentage who dont want help other than money into their hands.
From the first post my understanding was the OP wants to give his mother the money to buy the place and get peace of mind (however irrational that mind may be).
Having established that this can be done (the £3,000 limit is an IHT rule so if the OP dies and his estate exceeds the Nil Rate Band there could be issues) the OP then wanted to preserve his capital rather than see the Govt. burn it up in care fees by assuming it is an asset of his mother's.
Ignoring for now the moral high-grounding of greedy RTB profiteers vs. free housing for the lazy etc etc (I jest, obviously, the OP did not aske to debate the morals he asked how his capital/loan could be protected) there is a simple solution.
OP draws up a loan agreement or personal mortgage agreement with the aid of a solicitor. This preserves his capital and can be structured to accommodate interest if need be (rolled up perhaps). He doesn't get to profit from the RTB but Mum does, and if she needs care this will be deemed her asset. If she shuffles off without needing care his loan + interest gets settled as a liability on the estate, the residual can follow the terms of the Will.
Having established that this can be done (the £3,000 limit is an IHT rule so if the OP dies and his estate exceeds the Nil Rate Band there could be issues) the OP then wanted to preserve his capital rather than see the Govt. burn it up in care fees by assuming it is an asset of his mother's.
Ignoring for now the moral high-grounding of greedy RTB profiteers vs. free housing for the lazy etc etc (I jest, obviously, the OP did not aske to debate the morals he asked how his capital/loan could be protected) there is a simple solution.
OP draws up a loan agreement or personal mortgage agreement with the aid of a solicitor. This preserves his capital and can be structured to accommodate interest if need be (rolled up perhaps). He doesn't get to profit from the RTB but Mum does, and if she needs care this will be deemed her asset. If she shuffles off without needing care his loan + interest gets settled as a liability on the estate, the residual can follow the terms of the Will.
pacoryan said:
From the first post my understanding was the OP wants to give his mother the money to buy the place and get peace of mind (however irrational that mind may be).
Having established that this can be done (the £3,000 limit is an IHT rule so if the OP dies and his estate exceeds the Nil Rate Band there could be issues) the OP then wanted to preserve his capital rather than see the Govt. burn it up in care fees by assuming it is an asset of his mother's.
Ignoring for now the moral high-grounding of greedy RTB profiteers vs. free housing for the lazy etc etc (I jest, obviously, the OP did not aske to debate the morals he asked how his capital/loan could be protected) there is a simple solution.
OP draws up a loan agreement or personal mortgage agreement with the aid of a solicitor. This preserves his capital and can be structured to accommodate interest if need be (rolled up perhaps). He doesn't get to profit from the RTB but Mum does, and if she needs care this will be deemed her asset. If she shuffles off without needing care his loan + interest gets settled as a liability on the estate, the residual can follow the terms of the Will.
Thanks for the feedback, that is exactly how I am looking at it. Having established that this can be done (the £3,000 limit is an IHT rule so if the OP dies and his estate exceeds the Nil Rate Band there could be issues) the OP then wanted to preserve his capital rather than see the Govt. burn it up in care fees by assuming it is an asset of his mother's.
Ignoring for now the moral high-grounding of greedy RTB profiteers vs. free housing for the lazy etc etc (I jest, obviously, the OP did not aske to debate the morals he asked how his capital/loan could be protected) there is a simple solution.
OP draws up a loan agreement or personal mortgage agreement with the aid of a solicitor. This preserves his capital and can be structured to accommodate interest if need be (rolled up perhaps). He doesn't get to profit from the RTB but Mum does, and if she needs care this will be deemed her asset. If she shuffles off without needing care his loan + interest gets settled as a liability on the estate, the residual can follow the terms of the Will.
Sounds as though the solictor will be able to help and ensure that my outlay for the intial purchase can be secured.
Much appreciated.
northwest monkey said:
desolate said:
buy the house in your name and give her a lifetime lease on a peppercorn rent.
I'm pretty sure you can't buy a council house if it's in someone else's name - i.e. the tenant can buy it but the OP can't buy it for her.
OP can give her money to buy it. I assume OP will inherit house when Mum passes away. OP gets money back by selling house.
Countdown said:
northwest monkey said:
desolate said:
buy the house in your name and give her a lifetime lease on a peppercorn rent.
I'm pretty sure you can't buy a council house if it's in someone else's name - i.e. the tenant can buy it but the OP can't buy it for her.OP can give her money to buy it. I assume OP will inherit house when Mum passes away. OP gets money back by selling house.
pacoryan said:
Not if Govt have forced sale of home due to care fees and drained her estate leaving zip for OP, so OP loans the cash instead creating a debt on her estate - as per my last post.
Is that a loan or a gift?Is the money given to the mother in the expectation of a future pay-back?
Yes - loan agreement in place reverting to the lender on death for eg. or secured as a first charge mortgage against the property (assuming no other mortgage is in place)
IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
Edited by pacoryan on Thursday 20th February 11:33
pacoryan said:
Yes - loan agreement in place reverting to the lender on death for eg. or secured as a first charge mortgage against the property (assuming no other mortgage is in place)
IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
How would that not be interpreted be the council as the OP looking to buy the property for a quick buck, as he will be buying it at discount and then gaining himself when the OPs mother passes on.IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
Edited by pacoryan on Thursday 20th February 11:33
Would the council just sell the house and OP just get his money back if his mother goes into a home (if a charge is in place or a loan), so OP is no better off?
Du1point8 said:
pacoryan said:
Yes - loan agreement in place reverting to the lender on death for eg. or secured as a first charge mortgage against the property (assuming no other mortgage is in place)
IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
How would that not be interpreted be the council as the OP looking to buy the property for a quick buck, as he will be buying it at discount and then gaining himself when the OPs mother passes on.IMHO gifting the money to Mum would be exactly that, giving it away, don't expect it back!
Edited by pacoryan on Thursday 20th February 11:33
Would the council just sell the house and OP just get his money back if his mother goes into a home (if a charge is in place or a loan), so OP is no better off?
If she owns it, he has lent her say £50k and it's worth £100k, she has £50k of equity. If the property is sold to fund care he gets his £50k back she has £50k to put towards care fees. What she does after the second month is another matter.
As you say "OP is no better off" - this was his point, he does not seek to be better off in £ and pence, he just wants an easy life for his Mum. If circumstances should dictate that she passes away without the need to spend her equity then her beneficiaries (presumably including the OP) will get a silver lining to their cloud, but the fundamental point is the money he lends her cannot be spent on care home fees by the Govt. Worst case scenario OP gets his loan back and Mum has to spend her equity, but she has peace of mind in the interim which is what she doesn't have as a Council Tenant (as far as she is concerned).
tighnamara said:
No problem with paying the rent but the council are planning on carrying out some major insulation work on the house that requires her to move out for 3 to 4 month. Will provide her with another house / flat in that time with excess furniture put in storage. House will require to be completely re decorated from top to bottom. The works they are planning seem a bit over the top.
If they're anything like Camden council they will class that project as "Major Works" and will want paying back for it, if you take the house out of their ownership and into yours/your mother's. And the work will be at top prices, PLUS they will add a few percent "management / project administration fee" on top. So you will need to find out if the works will still go ahead if the house is in private ownership and if so, how much they are going to expect you to pay for them. Don't assume that just because you're buying the house they will just not do the work any more, it depends who the freeholder will be!kev1974 said:
If they're anything like Camden council they will class that project as "Major Works" and will want paying back for it, if you take the house out of their ownership and into yours/your mother's. And the work will be at top prices, PLUS they will add a few percent "management / project administration fee" on top. So you will need to find out if the works will still go ahead if the house is in private ownership and if so, how much they are going to expect you to pay for them. Don't assume that just because you're buying the house they will just not do the work any more, it depends who the freeholder will be!
when you buy a Council House you usually buy the freehold. Leasehold generally applies to flats.IMHO this is a red herring. The Mother has at the moment absolute security in being a council tenant. She cannot be evicted, if there are major works planned she has to be moved back into the same house. She is far more secure under that scenario than she is as a house owner. If she is not on benefit I think she has the right not to be moved into another property.
The OP should not be allowed to buy.
ALso IIRC you cannot buy and rent to your mother under a peppercorn rent, HMRC will be all over you like rash on a streetwalker. you have to charge your mother market rent, which would be more than she pays currently.
This is what is wrong with right to buy. IT matters not if the OP has no intention of making a profit, the fact is that someone will at some point. Once again we reach a point whereby folks with assets socialize losses and privatize profits. IT is very very wrong.
The OP should not be allowed to buy.
ALso IIRC you cannot buy and rent to your mother under a peppercorn rent, HMRC will be all over you like rash on a streetwalker. you have to charge your mother market rent, which would be more than she pays currently.
This is what is wrong with right to buy. IT matters not if the OP has no intention of making a profit, the fact is that someone will at some point. Once again we reach a point whereby folks with assets socialize losses and privatize profits. IT is very very wrong.
santona1937 said:
IMHO this is a red herring. The Mother has at the moment absolute security in being a council tenant. She cannot be evicted, if there are major works planned she has to be moved back into the same house. She is far more secure under that scenario than she is as a house owner. If she is not on benefit I think she has the right not to be moved into another property.
The OP should not be allowed to buy.
ALso IIRC you cannot buy and rent to your mother under a peppercorn rent, HMRC will be all over you like rash on a streetwalker. you have to charge your mother market rent, which would be more than she pays currently.
This is what is wrong with right to buy. IT matters not if the OP has no intention of making a profit, the fact is that someone will at some point. Once again we reach a point whereby folks with assets socialize losses and privatize profits. IT is very very wrong.
Wow, just out of curiosity how many council houses have been sold in the UK ?The OP should not be allowed to buy.
ALso IIRC you cannot buy and rent to your mother under a peppercorn rent, HMRC will be all over you like rash on a streetwalker. you have to charge your mother market rent, which would be more than she pays currently.
This is what is wrong with right to buy. IT matters not if the OP has no intention of making a profit, the fact is that someone will at some point. Once again we reach a point whereby folks with assets socialize losses and privatize profits. IT is very very wrong.
Why is it so wrong buying a council house, I am sure I could list a lot more wrongs than someone looking at buying a council house.
I am providing my mother with the funds to purchase the house and want to ensure I have the money that I provided her returned, absolutely no difference from any other of the thousands who have borrowed money from Halifax, RBS, Barclays etc. and paid off the loan.
My original post was not asking the rights or wrongs of purchasing a council house but how I could protect the money I initially provided my mother for the purchase.
There is no rent being mentioned, she will live rent free in the house.
The HMRC will not be all over me like a rash as you put it. Take your time and read the post before flying off on one, the OP is not buying the house, my mother is buying the house I am only providing her funds to carry this out.
Why is she more secure as a council house tenant than a home owner with no rent to pay ?
tighnamara said:
Wow, just out of curiosity how many council houses have been sold in the UK ?
Why is it so wrong buying a council house, I am sure I could list a lot more wrongs than someone looking at buying a council house.
I am providing my mother with the funds to purchase the house and want to ensure I have the money that I provided her returned, absolutely no difference from any other of the thousands who have borrowed money from Halifax, RBS, Barclays etc. and paid off the loan.
My original post was not asking the rights or wrongs of purchasing a council house but how I could protect the money I initially provided my mother for the purchase.
There is no rent being mentioned, she will live rent free in the house.
The HMRC will not be all over me like a rash as you put it. Take your time and read the post before flying off on one, the OP is not buying the house, my mother is buying the house I am only providing her funds to carry this out.
Why is she more secure as a council house tenant than a home owner with no rent to pay ?
Don't forget, if as you say the plan is to leave the house in your Mother's ownership until the day she dies - you'll have inheritance tax to pay on it. So ultimately you'll be losing much of the money you give her now (to make the purchase) anyway.Why is it so wrong buying a council house, I am sure I could list a lot more wrongs than someone looking at buying a council house.
I am providing my mother with the funds to purchase the house and want to ensure I have the money that I provided her returned, absolutely no difference from any other of the thousands who have borrowed money from Halifax, RBS, Barclays etc. and paid off the loan.
My original post was not asking the rights or wrongs of purchasing a council house but how I could protect the money I initially provided my mother for the purchase.
There is no rent being mentioned, she will live rent free in the house.
The HMRC will not be all over me like a rash as you put it. Take your time and read the post before flying off on one, the OP is not buying the house, my mother is buying the house I am only providing her funds to carry this out.
Why is she more secure as a council house tenant than a home owner with no rent to pay ?
So, that anticipated loss in mind, it might be worth leaving things as they are, and using the money you want to give her now, towards a better standard of old age care, if and when she should need to move to such accomodation. If you plan to leave her old age care accomodation entirely to the state, it probably won't be all that amazing, that's all; you could use your money to give her something better in the long run.
Edited by kev1974 on Sunday 23 February 19:17
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