Parents buying a house for me? Should I be more grateful? Why am I so concerned?

[Iamaperiwinkle]

This may be long. I will also change some details so it is not outing.

Over the years parents have offered to help buy a house but wanted to say where it was, know my full finances etc and I declined. I’ve not had a great 20 years financially and nearly lost a house recently due to divorce etc But 20 years have now passed. We have now moved local. Currently renting from a friend who has sold it - so we will need to vacate in 6-10 weeks, possibly 12-16 weeks. . I have some equity from a house sale. I can not afford much of a mortgage due to various reasons. So buying is not an option.

To rent a tiny 3 bed house here is £1500 or even more a month minimum, my salary is not even double that. So we were looking at moving further away again. My parents took me a see a for sale sign house and viewing 2 weeks ago and then revealed they had actually been there twice and had made an offer. The house is amazing 5 mins walk from the children’s schools etc far far better than any rental place we have seen.

Parents suggest a cash purchase. They buy it outright but want all of my savings and then I pay them an income for 10 years or if I can raise a mortgage to pay them off ie I raise a mortgage for £50 K or pay them £500 a month for 100 months - then they gift me the house. It is brought in their sole name. If they die I inherit the house - it’s a gift.

From their side - this is their entire money savings hence wanting my savings and monthly payments - but over 5-10 years they will actually be gifting a huge proportion of money to me. They want me to be liable for all bills, insurance, council tax etc and the savings I gift them 50 K -should I stop paying the £500 a month agreement and they aren’t able to get me out of the house if gives them security . They suggest buying it solely in their names on the deeds but I will give them my £50k savings although they will put it like £400 K into the house. An agreement in place, not the sell the house until youngest is 18. 10 years so a ten year plan . We are not moving from here for many reasons. Including father of my children is local.

They initially said I could put in my £50 K and they would put my name on the deeds but they changed that this evening. I’ve told them I can’t gift them my entire savings - what happens if they don’t gift me the house, or they don’t agree with my lifestyle or whatever - I’ve given it away.

They point out at paying them £500 a month should I want I could reduce the time from 10 years to 5 or even 3. The other way to look at it is renting is £17 000 a year minimum - so I’d lose more than that renting over 5 years. Ie pay x3 the rent with no hope of a percentage ownership.

From my side - I am responsible for all mantainence on the house but it’s not in my name - I said no to this. I’ve invested all my savings. This worries me. Parents want it that if they chose they could sell but would have to give me my money back. But the roof is in good repair as is the boiler and house is it good condition. I can’t move but this would be my forever dream home.

The kids are all settled in local outstanding schools etc and I have no desire to move - they need make that clear we want to live here parents are 70 odd but fit and healthy.

I know with his dad - dads brothers situation where he agreed to buy the son a house and son was going to pay them £1000 - he stopped paying his uncle and tNeither want to screw the other over but we do want to protect ourselves

In 3 years finances will be in a position where I could raise the 50 K mortgage needed at that point I could buy them out and I would aim to do it ASAP just in case they did need care etc so we would have it written it that as soon as I raise the 50 K the house is mine to avoid any issues.

There isn’t much trust not because of them or me. Dads brother bought a house for son and rented it to them to get the money back they stopped paying the rent and this meant dads brother was locked in a legal battle to either evict son or give up the house

The only that they would see first (holiday £100 K a year they have enough other assests to pay for their care if they need it. The 50 k really to ensure I am paying it and committed and giving them an income.

On one occasion they were going to gift me the house. But they are worried about income. On another they were happy for me to put my money in (much smaller % of the total cost) and then put it in joint names. Now it is theirs and I gift them my savings and pay rent but get given the house a few years down the line.

I’m so confused. We want to do them right thing.

No 🌺

The red flag for me is them being the owners. With you giving all your savings, the best part of a mortgage and ongoing maintenance costs towards the property. If your parents need care, it could be sold and you lose everything. Between both of them that is sadly a realistic risk.

It would be a no from me.

I think you should ask for this to be moved to Legal. You’ll get lots of people here telling you their opinion which isn’t what you need. You need hard facts.
For instance if you put in towards the purchase is there an option for you all to become Tenants in Common with your share of the property rising as you pay for upkeep and ‘rent’?

In their name? No. No way.

My parents are very generous and my grandparents were as well.

My grandad said if you give someone something it's theirs and they can do with it as they will.

What they are suggesting is a really bad move.

Have they explained why it needs to be in their name?

You'd have to get something legally binding drawn up if you wanted to do this. I don't think it'd be a gift so much as a trade. Sounds like a rental agreement with a bloody massive deposit.

Ultimately they do better out of the deal than you do- property is a solid investment so they're not losing money, plus you're doing all the upkeep AND giving them 50k for the privilege!

The other thing is that you get it when they both die? I don't know them obv but that could be years and years.
What if they need cash for care or similar? At that point they may decide selling the house you are in, is their best option.

I wouldn't do it.

Essentially it'll be, as PP said, a BTL for them and they get your savings and an income.

Other point is that larger houses cost more. Heating etc all more more. If the house is way out of your price range then running it might be an issue.

I got as far as the second paragraph but was hissing through my teeth at the title. Tell them to go fuck themselves, they're trying to control you. Keep your savings and rent a shoe box, it'll be your shoe box and you won't be dependent on them for your home. How dare they put in an offer on "your next home" when you haven't even seen it, much less agreed to the arrangement. You know what I think? They want to do a buy to let, with you as the tenant and your savings funding the deposit. Very nice - for them! Run OP, moving far away sounds like a very good idea, some physical distance might help you gain mental distance too when they can't so easily meet up with you to drip poison into your ear (because they probably are if they're controlling types, whether you realise it or not).

Why don’t you look at special schemes? Barclays do a family plan which might work for your circumstances. I wouldn’t want to do what they’re suggesting either.

This from Gov.Uk is useful.
www.gov.uk/joint-property-ownership.
Have a talk with your parents about your reservations and theirs and then spend some of your savings on a session with a solicitor who specialises in property.

My first thought, which I then saw others had already pointed out, is that if/when your parents need to fund care in their old age, you'll be made homeless because their house (that you're renting) will have to be sold to pay for it.

Also make sure you’re all aware if the Capital Gains Tax implications

I wouldn't for the simple reason that I value my independence.

Reading the other replies though, as your post was hard to comprehend, it does sound lke they want you to give them the deposit for a house purchase! Fuck that!

Are you an only child? Vulnerable or unwell? Do you have a track record of partners who take advantage of you?
In some instances this can be a good idea.

I would be concerned about the impact of care costs from two points of view

1. that if the house is in their name it could be sold to pay for care
2. if it looks like they've given away lots of money / assets in order to get themselves under the savings threshold for paying for their own care, then the council could come after you all for what's called "deprivation of assets"

This has "could go tits up" written all over it. There's got to be a better legal structure to do this with.

Have they someone 'advising' them? A solicitor? A more sinister presence? In effect, what they're asking you to do is to give them a house deposit for an investment property and they're guaranteed a tenant (you). This has NO FUCKING WAY written all over it.

Over the years parents have offered to help buy a house but wanted to say where it was, know my full finances etc

I could have stopped reading right there. They don't want to give you a gift or do you a favour, they want to put a leash around your neck. Hard pass.

As PP suggested there is the risk of them needing care and also if they give the property you there is the risk of it being seen a deprivation of assets.

They could mortgage/equity release the property.

The biggest issue with it being solely in their name is that anything could happen that requires this asset, which was bought partially with your life savings, to be legally counted as their assets and potentially at-risk if they become liable for something (eg if they are sued for some reason)

It's a brilliant plan if and only if your name goes on the deeds as a partial owner of the asset, strictly calculated as the percentage bought with your savings vs the percentage bought by them. You absolutely can't put in your savings with nothing on the deeds to show for it. You also shouldn't put in 100% of your savings. Keep at least 2 months worth of what your take-home pay normally is, as a buffer against future disaster/job loss/etc.

I can't quite get me head around the stamp duty rules but I think that stamp duty would be higher if they are the sole buyers whereas if your name is going on the deeds that wouldn't happen? Someone else may know more about that.

Families can be complicated. With the best will in the world people can make mistakes, unforeseen disasters can happen, relationships can break down. If everyone is genuinely acting from mutual love and respect then laying out the legal situation in a way that provides security and protection for both parties is only sensible. Skewing the situation on paper to disproportionately favour either party is a massive red flag that means Just Say No.

So they're not actually buying you a house. They're buying themselves a house, which YOU pay for. Sorry, but that would be a no...

I believe it would still be the higher rate of stamp duty due to it being a second property even if OP was a joint owner.

At the very least if you weren't on the deeds as a tenant in common you should have a charge over the property for any amount you lend them to purchase it. Definitely see a lawyer - not just a conveyancing one but one who deals with private client issues.

Don't do it.

It sounds complicated and there is already suspicion and concern on your part (and I don't blame you - I would also feel uncomfortable).

You've got kids to think about. Just do whatever you can within your own financial means- even if that means you can't afford to buy something right now. It's important to be independent.

If they really wanted to help out no strings attached then they could just gift you money, or pay for the house and put it in your name, but they are choosing not to do. Fine, their money, their choice. But this arrangement they are suggesting has a whole load of strings attached. I'd steer clear of the whole thing.

I have a feeling that they are trying to bring down the amount of money they have in savings/investments to avoid care costs at a later stage. Some one has given them this bright idea and they think you go along with this?
I agree with ismiseeire - this has no fucking way written all over it. You could doing this, end up having to spend a lot on the upkeep and maintenance of the house and it could be sold from underneath your feet to pay for your parents care. You will have lost a lot of money as well. If they want a buy to let let them fund it themselves.
I have a friend whos mother and one sibling have tried to pull a few smart moves on her over the past few years. My friend told me what they were up to because she said I don't like the sound of this. I agreed with her. My friend has said the word No to them and not done what they wanted either.
My friend said I am not doing what they want when it going to cost me money, leave me in a bad position or make my life more difficult long term. In the past her mother and sibling made a few bad decisions and these are coming back on them now. They have tried to get another sibling to agree to something recently. The another sibling has told both of them no.

Meanwhile my friend is aware of something her mother is planning. My friend meanwhile is just waiting for a while before she stops this plan in its tracks.

Hey OP,

A situation like this happened in my family and it worked, however all parties realised that the family relationship could be at risk if things went wrong (As they so often do in financial matters), and so extra precautions were put in place to try and avoid that.

These included that a solicitor drew up the paperwork to make the loan between parents and child clear. The house was in the child’s name, but the child had more equity in the home than you do. They also had worked out what would happen in the event of early repayments, late or missed payments, wanting to pay off in a lump sum etc - essentially all the things a bank sets out on a mortgage loan.

From a family perspective it was agreed that it was the child’s home, and the parents couldn’t demand any special rights (paint this wall, tidy the garden, let me in!), just like a bank wouldn’t be able to do so. They also agreed that there would be no discussion of spending choices - eg “you’ve just bought an expensive new bed/booked a holiday but you can’t pay us back any quicker” in the same way a bank can’t do so, assuming payments are made on time.

Things worked well and the child paid off the amount to the parents on time for the first 2 years, and then quicker and in full in a final year (5 years was the original loan agreement).

I’ve got no doubt this was because both sides were reasonable people. The parents genuinely wanted to help, and the child was very grateful and anxious to make sure the parents were not out of pocket for this loan. The child always sends them flowers on the anniversary of settlement day as a reminder and a thankyou, and the child ended up paying an extra £2500 to the parents at the end as a general ‘thank you’ for assisting them.

So it can be done. But really think hard about whether you and your parents are the type of people it can be done with.