Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Flip

1 2 3

Original poster

WWYD - Renting from relatives

61 replies

jazzyoldjim · 21/02/2022 12:17

DH and I are on fairly low wages (NHS staff) we have two young children and we have always struggled financially, we have lived in 5 rented houses together in 9 years. A few years ago it was suggested (by them) that DH's parents could buy a house for us to rent back from them - help us out.

The terms were - it was going to be in a specific area chosen by in laws for investment purposes, it had to be a new build for ease of maintenance (by them) and they agreed to charge us less rent than market value. A house was chosen and they took us to view it - seemed fine, we were happy, they were happy. They made an offer on the house and got it, they bought it outright - no mortgage. They gave us a tenancy agreement, the rent is cheaper than the market value for a 3bed however it is still quite a lot, it is the same as we were paying in our previous private rental. This house is also a higher council tax band. We are not any better off financially here.

Fast forward, we have been living here for 3 years and we are not massively happy. Its not the best area for us in terms of getting to work / social aspects / things to do for the children. The house itself is very small for 4 people and the extension needs some serious repair work (that they have been promising to do since we moved in) we have decorated and made it really homely, but I am reluctant to pay for any structural work because we will not benefit from the return if the property is sold.

My DH approached his parents and asked what would happen if we wanted to move, his mum was annoyed and said we'd need to go back to private renting elsewhere. We have secretly put ourselves on the council house list but it seems very slow going.

I don't want to seem ungrateful at all, but I can't help but think its a bit of a raw deal, and we are kind of stuck in it.

WWYD?

OP posts:

swirlsy · 22/02/2022 17:45

I don't think they are being overly generous and you don't owe them anything.

agree

swirlsy · 22/02/2022 17:47

Whilst not havibg access to the considerable funds that they used to buy the house for them and could have been spending that money doing whatever they wish with!

Maybe there were always going to buy a BTL. They have benefited from having family as tenants.

HTH1 · 22/02/2022 17:50

Yes it does sound like there was a mismatch between what OP thought they were offering “to help” and the reality.

As they are DH’s parents, he should be the one to have an open and honest conversation with them explaining that the rent is a real stretch and the property isn’t really right for you (which could be overlooked if the rent was right so that you could save for your own property). If they don’t budge and significantly lower the rent, time to find something else if you’re sure that there is something better out there within budget.

RedHelenB · 22/02/2022 17:52

@ChoiceMummy

So they've paid for you to have home security? And now you wish to retract on the agreement? You should have talked through if you wanted out before letting them proceed imo.

This.

SeasonFinale · 22/02/2022 18:10

Presumably having tied up their capital in a property they use the rent as their income to live off otherwise they would have just left the capital amount in their pension/stocks and shares etc to earn an income that way.

If you are paying the same as before but it is less than market rent then that suggests uiu are renting a nicer property than you would otherwise be in. I am not sure where you live but round here getting a council house when not actually homeless would be nigh on impossible.

What did DH expect his mum to say? That she would sell and buy another house for him somewhere else?

What needs repair after 3 years? You have said they bought a new build.

Eightiesfan · 22/02/2022 18:11

The CFs are using you to top up their pensions! Do you know what their mortgage payment are? As landlords (and family) it is their duty to make sure the house is regularly maintained, you should not be considering doing any work. I hope you find an alternative place soon.

LightfoldEngines · 22/02/2022 18:14

Yes it will be very slow going on any council list in the country right now because there a lot of people being made homeless, you are currently housed by relatives and so will not be a priority in any way.

I wouldn’t move to an area I didn’t want to just to live somewhere owned by family, especially if it was the same rent, more council tax and a rubbish area for your work and social needs.

Authenticcelestialmusic · 22/02/2022 18:21

How much under market rate is the rent? If you compare it to what is on rightmove today , same size house in the same area at 2022 prices?
It could be that the house cost £500000 and would rent for £2000 a month now. Meaning the parents may have made far more in shares or renting to strangers rather than putting all the money into a house. So in their eyes they are trying to help you.

Security and the ability to decorate etc would be a huge plus to me.

Exactly what repairs are required?

Can you afford to rent in the area you want? If it’s more suitable then move and let your PIL rent out on the open market.

Authenticcelestialmusic · 22/02/2022 18:24

You say it’s a new build but has been extended. Presumably it wasn’t brand new when they bought it if it had been extended. Does the extension work have a guarantee? It’s worth checking with the solicitor they used when they bought it .

alwayslearning789 · 22/02/2022 18:24

I think you will find that the free rental market is a tad more brutal than when you left it.

The reality of your situation before this arrangement sounds like it was very difficult back then. 5 moves in as many years.

What others would give to have the security of your situation right now.

No immediate answers for you but do look before you leap.

Hankunamatata · 22/02/2022 19:17

How does a new build need structural work? Surely that would be on the snagging list.

Hankunamatata · 22/02/2022 19:19

What is the market value of rent in the area? Perhaps discuss reducing rent slightly with inlaws?

WomanStanleyWoman · 23/02/2022 02:43

@Eightiesfan

The pension lot would be much bigger if these ‘CFs’ charged market rent. Or hadn’t bought the house at all.

Yes, they can afford to buy the house outright - but that’s not cheap. They can’t draw on that money for their retirement. They need a rental income for the house. The OP has made it quite clear that they aren’t getting what they could - and she’s still not happy.

ChoiceMummy · 23/02/2022 07:48

@Whammyyammy

They've made £37k plus whatever the house has increased by over the last 3 years, move and don't feel guilty.

So approx 12k a year for all of their savings tied up in the op's home, to have to pay tax on, probably around 3k a year (modest guesstimate), be responsible for all repairs, need to pay insurance for.

At a reasonable guess, I'd say in real terms they'd be lucky if their "return" was even 6k at the end of it.

Dobt try to suggest they're rolling in it because they bought a home for the op and charged a lower than market value rent! They're not the "baddies" here.

ChoiceMummy · 23/02/2022 07:52

And that fails to take into account the additional costs tied up with buying the property initially, surveys, solicitor fees, tax etc.

When you take that into account the likelihood could well be that they're barely breaking even 3 years in!

Not to mention that ultimately, the op's oh will no doubt benefit in inheritance from this!

And the op always had to pay rent, so imo the security this offered is better paid to family than someone else!

Malibuismysecrethome · 25/02/2022 11:37

Being a landlord is not just about the rent you receive there is capital appreciation on the property (or not) during the 3 years.

FairyCakeWings · 25/02/2022 11:42

Capital appreciation means precisely fuck all until the property is sold, and even then you can’t sell for free.

LoveMyPiano · 25/02/2022 12:08

These kind of arrangements make me absolutely sick. They are greedy, at your expense...... Just a win-win for them. No-body ever did this when property prices were falling.

I always wonder what might happen if they should die....

(My shit of a "father" toyed with the idea, but retracted it beore it even got off the ground - which is typical MO for him.)

SeasonFinale · 25/02/2022 13:44

@LoveMyPiano

These kind of arrangements make me absolutely sick. They are greedy, at your expense...... Just a win-win for them. No-body ever did this when property prices were falling.

I always wonder what might happen if they should die....

(My shit of a "father" toyed with the idea, but retracted it beore it even got off the ground - which is typical MO for him.)

It is hardly at their expense when the expense to them is a below market rent and with security of tenure. If the OP and her DH are not happy with the arrangement they are, of course, free to give notice and move somewhere else paying market rent and with the uncertainty as to whether a new landlord will serve notice to evict after 6 /12 months, whether the rents would be increased annually and whether that landlord would be a good one with regard to repairs and maintenance or a poor one.

WomanStanleyWoman · 25/02/2022 14:26

@LoveMyPiano

These kind of arrangements make me absolutely sick. They are greedy, at your expense...... Just a win-win for them. No-body ever did this when property prices were falling.

I always wonder what might happen if they should die....

(My shit of a "father" toyed with the idea, but retracted it beore it even got off the ground - which is typical MO for him.)

I’ve seen lots of comments like this on the thread - but I haven’t seen a single explanation of why the OP and her husband couldn’t have said ‘No’. Why, if it’s such a terrible deal, they agreed to it.

I don’t buy the greed argument either. The PILs didn’t take out a mortgage - they had the money in the bank. If they were only concerned about money, they could have just spent the money they already had on something else.

As for ‘No one did this when property prices were falling’ - why would they? Who invests in something they expect to depreciate?

Phormiumjester · 25/02/2022 14:38

They aren't making any profit until they've got back what they paid for for it plus all the associated expenses.

It's not £1k a month profit at all. It's just getting some of your investment back. When the cash to buy it came out of their savings.

I think it depends how the conversation went.

"We have nowhere to live"

well we can buy a house but it'll use our savings that we live off and so we will need you to pay rent on it to cover what we don't have now, monthly, in our savings.

We can't afford to buy something that's not saleable because if you or someone else isn't paying us a monthly rent, we can't live the life we've saved for. So it's going to be in an area that suits us. Also, we don't have spare for renovations. Does that work for you?

If it's that convo, you were able to say yes or no.

No?

ChicCroissant · 25/02/2022 14:56

I'm struggling to believe this is real, which part of it is a raw deal for the OP? She's got a house below market rate that she approved before her in-laws bought it.

So was it a new build OP, if so when was the extension done?

Freddiefox · 25/02/2022 15:05

Surely you’ve got three choices.

Stay,

Rent elsewhere, maybe pay more maybe not, risk being moved on.

Wait for a council house.

You don’t owe them anything, but I understand why they might be upset. That doesn’t mean you need to stay there, but recognise they were trying to help you out.

confusedlots · 25/02/2022 15:07

What are your longer term plans to get yourselves on the property ladder? You can't rent forever, or maybe you're hoping there will be a sizeable inheritance from your in laws one day?

If your in laws have spare cash they're willing to invest to help you, I would have looked into the possibility of them lending you the deposit for your own house which you would have then paid back (with some interest) over a period of time. Would have been much more beneficial for you rather than continuing to rent

StoneofDestiny · 25/02/2022 15:46

They haven't done you any favours - you are paying a mortgage for them on their investment property. It suited them, it no longer suits you. Surely they did not imagine you'd be staying forever?
They have lost nothing - except their tenants, and they can get new ones.
Move to where it suits you and just live your lives without their 'help' in this way.

Flip

1 2 3

Swipe left for the next trending thread