Am I the only one that thinks this is highly suspicious

She'd probably make more income from taking in a lodger or two under the rent-a-room scheme (up to £7,500 tax free).

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

Sounds like the builder wants to own the freehold. You mum really needs to understand who will own the property and not sign anything.

😆

a blind man on a galloping horse would see right through this blatant scam

This.
For the love of god please don't let this happen.
Show her this thread and get advice from a property solicitor. They'll put her straight.

Does she realise she won't get any income from the flats for years? He will be receiving all the money. She will be responsible for the management and the costs.

It's a total disaster.

Get her an appointment with an accountant to run through it with her.

Frame it as 'the responsible thing to do, when you start a business/go into business with someone'.

She thinks she's going to be a business person- expect her to behave like one. Business people get contracts checked by lawyers, accountants, have legal representation before committing to things.

If you describe it as normal business practice for professional people, use phrases like due diligence, partnership, business, contract, investment, etc, she may be more inclined to take it seriously and behave appropriately.

This 100%.

Indeed. I honestly can’t emphasise how much of a hassle I think this is going to be for her. Does she have previous experience of letting/managing properties? Is she going to use an agent to find tenants or is she planning on managing this herself, in which case she will be responsible for credit checks, referencing, placing deposits in a scheme, inventory – I could go on!

With none of the hassle either!

Also, as an existing landlord, I would advise anyone against getting into buy to let Property at the moment. It is a heap of work and expense and the returns are not good. I don’t see things improving under a Labour government either, in fact, I think they will get more difficult for landlords. Your mum really hasn’t thought any of this through. Do you know what her actual financial situation is OP? Does she need additional income? What is her pension situation?

Your mum obviously doesn’t have a particularly sentimental attachment to her home if she is considering carving the whole thing up into flats and if she is going to end up living in one of those flats why doesn’t she just sell the house and downsize to a one or two bedroom place. The equity freed up and invested could provide just as much of an income as those flats/bedssits will.

is she living in an area with high demand for small flats ? Has she thought about the noise aspect? Flats in converted houses aren’t always great from that point of view and she’ll end up managing disputes between neighbors especially if she lives there and is the landlord

Well that’s just daft. She needs to go and see about a loan instead of presuming she won’t get one and a solicitor.

Has she actually tried to get a loan?

And presumably he will add an element of interest onto the loan for the work. I would guess he would want 10% or something on the outstanding amount calculated monthly? yearly? The devil will be in the detail. Or he will add a big chunk to the bill for the work to cover notional interest over a number of years.

Mum will have to cover all the maintenance costs, agents costs? While he recoups his money from the rent. Or will he take half or threequarters of the rent so she can cover other costs? So many questions.

Sorry I meant a factor in getting a banl loan.The builder plan is loop the loop!

I am not sure why her age would be a factor in a plan like this as it doesn't depend on her working.It is a case of whether the numbers stack up

This sounds crazy. What happens if she can't find tennants for a start?
I too think the builder is up to something, and will put pressure on your Mum to sign things over to him.

Well it does kind of make sense.
Say he puts in £50k worth of work.
Then receives rent of £1k a month once the work is done. I imagine he is including a huge 'interest' rate so he would probably rent of £1k pm for 100 months for example. It just means his payment is spread over a much longer period. What is in it for him could be 1) higher than it should be charge for building work, and 2)(effectively) a very high interest rate.

You need to see the terms he is offering and do the sums to show total payment for the work (including interest on any loans, a like for like total cost).

I can’t even imagine how a 4 bed house could become 4 flats. What about bathrooms and kitchens?

Have you seen the plans? Has a structural engineer done a report? Has a building license been applied for?
There's a big difference between a bed sit and a one bedroom flat.
This sounds completely unmanageable. And I cannot see any builder doing this. What a he a member if any sort of federation? VAT registered? Has she looked at any of his previous work? Has he given her a contract?

So it's a 4 bedroom home and she wants to turn them into 3-4 1 bed flats/bedsits for rent.

Well, I'm 69 and think this is a ridiculous idea. Unless it's a mansion think of how thin the walls will be. Awful. I can hear my grim neighbours arguing, one time so bad I phoned the police. They've calmed down and shut up now thank god.

The fact she's making "a deal" with a builder rings all kinds of alarm bells.

I think @ZoomDoomZoom could well be right that that's the plan unfortunately