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.

Yanbu

And its really quite cruel to show you "what you could have won" but this isn't a proper offer, they are moving the goal posts already and it has disaster written all over it.

Unfortunately your parents cannot be trusted and you can't "do business with them"

They want to eat their cake and have it.
Avoid inheritance and care fees.
Look like the big I am by "buying you a house"
Have a nice control mechanism to keep you in line.
Get a rental income from their "gift"

My sister is like this. It's not intentional its just who she is but its shit because you want to be able to rely on your family

Your parents will have to spend an extra 3% in stamp duty as this house would be their second property. What’s that - about £15k? Madness.

Wouldn't touch it with a barge pole. They either buy it and rent it back to you and gift it to you at some point or walk away.

You have no security, you'd be investing £50k in a house that isn't yours.

My mum recently gifted us some money which we are using to buy a property to live in and she is coming to live with us. Different situation I know but we found a solicitor who dealt with property, finances, trust funds etc and the three of us had a zoom appointment. The pros and cons were set out to us and it really helped decision making.

I would suggest to your parents that you arrange a similar appointment. Do not do anything without legal advice.

Don't do it.

Together with the care situation. Their house coukd be used to pay for care and then when they die there may be inheritance tax to pay and then sell your house to pay the bill.

Its stupid to put in your own money but have no legal right to the asset. At a minimum it needs to be in joint names say you and your dad. Equal.

Th ink youd be better renting. In time they will hopefully pass on inheritance and you will be secured in old age.

In your case, OP, I’d also look into the scheme where you can half-buy, half-rent a house. Help to buy..? Is that still a thing? It’d enable you to secure a nice property with your £50k, and gradually buy more of it over time. It’s only available to some people, but single mums generally qualify,

I’ve read you post OP. Perhaps someone has mentioned this already but your parents don’t know what may happen in the future. Originally my parents wanted to leave their beautiful house to me but they both developed dementia, passed away last year and the house had to be sold to fund their care. There was nothing left at the end of the day. If their names are on the deeds, then your home could be swiped from under your feet to pay for a similar event happening and you could be out on the street and penniless. The answer has to be NO.

a million and one reasons for not going ahead with this OP,,,,I would run a mile,Say no and sort yourself out.

no no no no no NO.

They want to buy a house, they pay for it!

I was ready to say no even before I read the detail on 'My parents want to buy a house for me'

... and then I read that they actually want to take your savings and buy themselves a house which they'll allow you to live in!!!!!

No.

Your savings = your house, in your name.

Their house = their money pays for it.

Simple as that.

They are controlling, they don't respect you, this will 100% not end well.

If you can really see no better way (considering things such as: moving schools to an area with cheaper housing, looking at shared ownership, moving further from school etc.) - then go to a solicitor and talk this through. But there shoudl be one absolute red line, which is simply not up for discussion. Your name needs to be on the deeds. If you are investing your money, you need to own that house - whether jointly, a percentage - a solicitor can advise you, but the red line needs to be that you own that house even if only partly - and your parents never ever get to utter the words 'Well this is OUR house!'

But really - given the history - don't do it.

50k is a lot of money.

@RebeccaCloud9

As pps have said, what if one of them dies and the other remarries? My fil remarried a year after my mil died, sold the family home without telling his children and moved away and is now no contact. We don't expect any inheritance from him and his new wife - all this was unimaginable whilst mil was alive. Things can change. Massively.

A friend had something similar happen. Her DF had a house worth close to £2m. He remarried and had another child. When he became unwell, he and wife sold up and moved into a (very posh) flat, he died shortly afterwards and everything went to the 2nd wife.

Friend and her brother inherited fuck all. There wasn't even an acknowledgment that they existed. Friend and her dad were close, too. She's incredibly hurt.

They are not buying you a house - they are buying themselves a house, getting you to contribute towards it and then making you pay upkeep and maintenance and charging you rent. They've already chosen the house and made an offer without you having any input whatsoever. Once you are tied into this arrangement you will have no possibility of buying a house of your own. If you are happy with this and are confident they won't screw you over (impossible to get a real feel fo how likely this might from a post on the internet) it does sound like an instant solution to your property worries (especially if the alternative is handing over most of you income every month to a private landlord). But make no mistake - you will be living in your parents house and paying them for the privilege in the hope that some years down the line it will be yours. If they don't want to take legal advice to try and find a way of putting the arrangement on a more secure legal footing to give you more assurances then I would be asking myself why not.

I wouldn't do this , legally not having your name on the deeds puts you in an awful position. I would move somewhere cheaper

I wouldn’t touch this with any form of barge pole. Your parents want you to live in a house that they have chosen, take all your savings and somehow you should be grateful. Nope. Gifts have ribbons not strings.

My first mortgage was with my parents - the deeds were in my name with my parents having a charge against the property. I paid them interest on the loan and it was all drafted up by a solicitor.

This looks very odd, and you need to speak with a solicitor before talking with your parents about any of this. Any money you spend talking to the right professional is always worth it.

But you already know something is amiss - that's why you came on here. Your parents might think they're helping though control does seem to be a thing from your OP but it's only help if it's right for YOU.

If they go into care the state will expect the house to be sold to cover the cost. This is happening to a friend now even with the parent only owning 20% of the house.

They need to put it all in your name and draw up a legal contact for you to pay them x amount over time.

You put in your 50k and they keep 50k back.

So your savings become their deposit, for a house with a guaranteed rental income but you have no protected interest in the property?

No. These arrangements can often be fraught even when properly documented with appropriate shares in the property. The situation you describe has the potential to be a nightmare.

Absolutely not.

I suspect that what is going on here is that the parents are, with good will but not much foresight of what could go wrong from OP's pov, trying to use their assets to secure an income for life for themselves. They will be on the receiving end of sales pitches from investment companies wanting them to hand over large sums in exchange for a secure income but they would rather do it in a way that benefits their own daughter and grandchildren. So far, so admirable.

The problem is that they don't know how long they are going to live. If they agree to a mortgage-style arrangement and then live long enough that OP has officially paid them back, then they are left with that lump sum now gone and a sudden loss of a significant chunk of income that they have relied upon. Of course they may not last that long but I suspect the reasoning behind their proposal is due to wanting to know they aren't risking putting themselves into financial hardship in future.

You need to talk to them op and work out what they really want. If what they really want is control over your life then you can just say no. If they just want security for their financial future in a way that also helps you out then there has to be another mutually acceptable solution that doesn't jeopardise your own financial wellbeing in the process.

Maybe tell them if they want to buy a house with their cash they should do that and you will pay them fair rent? Or you go on as joint owners. Otherwise you are sinking your money into something you may never get the return on.

Noooo - you'll lose the house when they need care. You need to be tenants in common at the very least.

In principle it's not a bad plan to want to do this - it's a sensible way of protecting you from inheritance tax without losing their assets, AND securing a home for you when you need it most.

BUT you are too vulnerable in the set-up they suggest.

ALL kinds of things could happen that would leave you homeless. Your Mum dies and your Dad remarries - you're out. Your parents need to go into a care home - you're out. A sibling gets snotty about it and talks them into a different arrangement (this is happening on another thread where the FIL is basically handing over all of his assets to one of the poster's siblings) - you're out. They lose all their money in a time-share scam - you're out.

You need to be on the deeds.

Somewhat similar to previous poster, within our family (parent and each of his siblings), my grandfather loaned the money to purchase their homes. There was a loan document drawn up. Ownership of each sibling’s home was in their name. The value of the loan was actually les than monetary value given (monies for house purchase were part gift, part loan). My parent owned the home outright and paid off loan monthly, as did each sibling with their respective loans. Never had a problem.

No.

This is about control. It sounds like a scheme my FiL would draw up. He changes his mind on a whim and would like that he would hold power over us.

We have been clear that we do not want any "gift" that comes with strings attached. It is the thin end of the wedge. They can vetoe partners, school choices, holidays, cars we choose. And they would.

You need a Deed of Trust if you go ahead. Potentially what about inheritance tax, it may have to be sold to pay this. By covering all the bases to protect themselves they are leaving you vulnerable. What happens if the property increases in value with you doing all the maintenance and no expense to themselves.

You can't just gift £50k anyway, there are tax implications. There is a 3k per year limit per person. Also what happens if the house needs to be sold for care home fees? Then you'll have lost money and be homeless.

I think you need to get legal advice, there is your security as well as any issues that might arise from them needing care and any complications that might cause.

There's also the issue of what might happen if you had to stop working so you'd need insurance for sickness etc.

In principle it's a good idea to get you back into property ownership. Good luck with finding a way that works for all of you

Gifts should come with ribbons attached, not strings or chains.

Aside from all the future potential issues regarding care home fees IHT etc. You'll always be on eggshells around them. Upset them and they could make your life miserable.

Been said here lots of times...SOLICITOR

But personally, I'd say thanks but no thanks.