Inherited house, what to do?

[meanderingmanchild]

I live in social housing with right to acquire, worth about £100K and could stay here.

Left house worth about £100K that I don't want to live in.

Nicer, downsized for age, homes priced £200K

Never had a mortgage, 45 years old.

What would you do with the house? Sell? Buy my place? Put down for mortgage on other place? Invest?

-never had such money before

@Lizzt2007 right to acquire is different. when I moved into my HA property 3 years ago the clause about right to acquire was in my tenancy.

It means if I decided to buy then they would clear old housing stock and build new properties.

I don't understand why (buying social housing) is even an option, but yes I am being selfish at this point and seeking a solution for me, not wider society

At least you're honest, OP - I just hope that, before the inheritance arrived, you weren't one of those who went on and on about how wrong it was to do this

Can you work backwards:

At retirement, you will have state pension (approx £1000) per month. If you are paying your current rent of approx £350 per month - you would have approx.£650 per month to live on and no house maintenance costs. If you sell the inherited house and invest £100, 000 for an income - usually estimated to be approx 4% per year - that would be an additional £350 approx per month (from now).

Can you beat that if you buy either your current or new house and so end up not needing to rent in retirement (but do need to pay insurance/maintenance)? I think that depends on your current income, whether you receive any benefits, mortgage rates and expenditure. Also the rules around your tenancy and how much is the potential right to buy discount.

My instinct would be to sell the inherited house and keep renting for now while you make a decision but I think you need more concrete numbers.

In your shoes I think I would sell the inherited house, buy the house you’re in just now and invest the money you were paying in rent into some form of pension provision. Build your business so you can then afford the mortgage on your future proofed house down the line.

I’m assuming you’re in receipt of benefits to top up your low income just now, so securing a home and reducing your reliance on benefits would be a priority for me.

I would also sell the inherited house.
Be savvy with savings using all tax free options isa and premium bonds.

You could earn 5k a year in interest on 100k

Keep living where you are, work on your business.

In a few years see where you are and you will be in a much better position to buy your property or move depending on your circumstances.

Gives you lots of options!

If you got a mortgage for £100,000 for 25 years at a mortgage rate of 5.15% then it would cost you £594 per month. However, that takes you up to age 70.

In your position I would buy your current place outright and would invest the amount you pay in rent, so that you have more money in retirement.

Not sure if your current house is a flat in a block or conversion, or a house. Either way be very careful about purchasing. You will be liable for repairs and maintenance of course, but additionally if in a block or conversion you will also probably be liable to a share of maintenance payments for communal areas and for the maintenance of other features of the property , which could include, improved security, a new roof, a new lift, cladding, new windows etc all of which would be your liability to share as the owner but you would have little or no say in the time scale, or the companies employed to do the work. Many people who have bought ex authority flats in blocks have come unstuck when they are faced with bills for many thousands to cover work, if you don’t have the money upfront then a charge is put on the property when you die or sell, which could seriously hamper your flexibility to move. Do get some independent advice.

Read your tenancy agreement. You can continue to rent with the money you get from selling the other property, but you will not be able to hang on to the other property

Ignore all those who keep banging on about 'morally' your house should go to someone else now you've acquired some money! Lack of social housing is not your problem, it's for the government to fix and if they were in your situation, they would hardly just hand back a HOME you've built up for your family for some random!!

Assuming also you've lost a parent in order to be in the situation you're in, not just won £100k house on a lottery?!

Reading your comments on you being on a low income, chances are, even if you can afford the £500+ a month mortgage, your probably unlikely to be eligible to actually get the mortgage in the first place as most banks will see it as too risky, even more so if you're self-employed. We had to provide 2 years of bookkeeping for my partner along with proof of my salary in order to remortgage last year!
Bear in mind, if you're on any benefits, these will be affected if you have anymore than £6k in savings so I would sell the house, but looks into ways to invest the money you've acquired, ISA's/bonds/pension - even put some into your child's savings for when they're 18 and need to start driving and carry on renting your home until you're ready to decide what you want to do re. Bungalow.

Oh and don't speak to your housing officer for God's sake, they will say if you have another home, you're not entitled to live in the house you're in and could force you to move into the other house which like you said could be miles away and mean you having to move your whole family life!!