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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Buy Property or Remain on Housing List?!

109 replies

PurpleRayne89 · 23/10/2023 08:34

My uncle is moving back home. His property is worth £400k but said he’d sell it to me for £230k as long as he can remain in the property until he leaves which is around 10+ years. He said he’ll pay the mortgage until that time. He will also put down the deposit for me and my aunt will be a guarantor.

I’m living with my 2 children in a single room as we can’t afford to move. I’m on the housing list and bid each week. If I have a house in my name, I’ll be removed from the register. Then I’ll be stuck in this room. If I didn’t take the offer, I may not have another chance to own a home / have an asset. Can I have some advice please?

Background. We ended up in this room at a relatives house because I lost my job during COVID which was well paid. I’m working full time now but don’t earn enough. My ex husband pays child maintenance each month around £750.

OP posts:
WrongSwanson · 23/10/2023 09:53

It's fascinating learning how people game the system. I feel so naïve

BMW6 · 23/10/2023 09:55

Your Uncle sounds as dodgy as Fuck, as pp has outlined there are serious legal and tax ramifications in this ludicrous proposal.

You say he's had "problems" with his mortgage before.........why does that not surprise me?

Don't touch this with a bargepole OP. This is not a gift but a trap.

forgotmyusername1 · 23/10/2023 09:57

sounds like he wants to have it taken out of his name due to possible care home costs

Oxborn · 23/10/2023 09:58

Can’t blame him on that one imo but wouldn’t he just say that

Original poster
PurpleRayne89 · 23/10/2023 10:23

@WrongSwanson Who’s playing the system?

OP posts:
CrazyHamsterLady · 23/10/2023 10:44

That’s a fantastic offer. Admittedly, it’s not completely perfect as he’ll be living with you but if it’s your only chance then take it. Imagine how hard it will be paying rent on a pension. My mum had to move in with us because of poor financial choices in her life and only having a state pension to live on. She would likely have been homeless otherwise 🤷‍♀️

Ginmonkeyagain · 23/10/2023 10:45

Your uncle. He is either trying to keep his house in the family and avoid selling it for care home fees/other debts OR he is trying to release equity but avoid the repayments on his death. The whole thing sounds a crooked as fuck.

It is essentially fraud as he is trying to get you to borrow money from the bank, give it to him in exchange for a promise that sometime in the future you will get to live in the house. What does he intend to do with the £230k he wants you to give him for this "promise".

paintingvenice · 23/10/2023 10:45

If you can’t afford the repayments what would happen if he keeled over tomorrow? Life expectancy for males is 79, so it’s not beyond the realms of possibility.

Alternatively what would happen if he needed a high level of care- are you prepared to take on that role? Him moving into a home would require funds and if he couldn’t pay selling the or to you at below market rate could be seen as intentional deprivation of assets.

what would be best as he is below inheritance tax threshold and he doesn’t need to do anything clever would be for him to just leave the property to you. Anything else simply seems shady.

Ginmonkeyagain · 23/10/2023 10:47

Also the uncle is putting himself at risk. If, as he proposes, you own the house and he continues as a tenant, after this there is nothing to stop you from eviciting him or selling the house to someone else.

Frasers · 23/10/2023 10:57

so basically he can’t get a mortgage so is offering you the house for the max mortgage you can get, so he doesn’t need to move out, and he will then pay the mortgage himself, which is he will pay you enough rent to cover the mortgage, I guess including the tax you will need to pay.

well it’s better than him giving it to an equity release program. But if you can’t afford the mortgage repayments, who is paying to maintain the house, and what if you go periods without rental when he is no longer there, and you also need to pay to maintain it.

Original poster
PurpleRayne89 · 23/10/2023 11:06

Everyone had made very valid points. I’m leaning more towards No at this stage as the main thing is someplace suitable for my family and I to live now as we can’t remain here for forever. It’s all a bit shit unfortunately. I have to also pay £970 a month on childcare which is why we’re are living with my parents and why I can’t afford to rent privately at this time in my life. I’ve tried and can only afford a studio. I’ve spoken to my uncles mortgage advisors and he said it’ll be a joint mortgage with my uncle and I. He didn’t disclose this. When I ask for information, he says I should just trust him and stop asking questions as he knows more than me.

OP posts:
GCAcademic · 23/10/2023 11:06

CrazyHamsterLady · 23/10/2023 10:44

That’s a fantastic offer. Admittedly, it’s not completely perfect as he’ll be living with you but if it’s your only chance then take it. Imagine how hard it will be paying rent on a pension. My mum had to move in with us because of poor financial choices in her life and only having a state pension to live on. She would likely have been homeless otherwise 🤷‍♀️

Edited

He won’t be living with her. The proposal is that he’ll be living in the house on his own, while she stays in a single room at her parents with two children and will therefore no longer be eligible for housing from the local authority.

And, if the uncle doesn’t pay the mortgage that is in her name, she’ll be liable for it. If he does pay it as promised, she’ll be classed as receiving rental income and will be taxed accordingly.

I’d run a mile from someone who suggested such a scheme.

GCAcademic · 23/10/2023 11:08

When I ask for information, he says I should just trust him and stop asking questions as he knows more than me

I’d been wavering between thinking that your uncle was either naive or scamming you. This has tipped the balance.

selfselfiequeen · 23/10/2023 11:10

Avoid. Sounds dodgy.

TarantinoIsAMisogynist · 23/10/2023 11:11

PurpleRayne89 · 23/10/2023 08:39

I meet the threshold for the mortgage for that amount. However, I realistically can’t afford the repayments. Which is why he’s remain in the home to pay the mortgage. He’s essentially be renting from me. Then when he moves, I’d continue to rent it out.

This makes no sense. Mortgage lending is based on affordability. If you can't afford the mortgage, no bank will lend it to you.

TarantinoIsAMisogynist · 23/10/2023 11:12

GCAcademic · 23/10/2023 11:08

When I ask for information, he says I should just trust him and stop asking questions as he knows more than me

I’d been wavering between thinking that your uncle was either naive or scamming you. This has tipped the balance.

Yep. 100% scam

Never, ever enter into a significant financial arrangement with someone who won't be transparent about the reasons for it, and exactly what you're signing up to.

Ginmonkeyagain · 23/10/2023 11:15

So your uncle is looking to remortgage and bring you in on the mortgage as additional income for affordability purposes? The bank will not allow this if you do not intend to move it/he won't let you move in. There may be a very few specialist family mortgages that will allow this but they tend to be aimed at first time buyers with parents who have very good credit/affordability.

Why does your uncle need to remortgage at this point in his life? Has he perhaps got an interest ony mortgage that is coming to an end and he needs to pay off the capital? If so the best advice for him would be to sell, pay off what he owns and downsize, not drag his homeless niece in to some madcap scheme.

TheGirlWithGlassFeet · 23/10/2023 11:16

It sounds like he wants to release money from the property and thinks he can help you at the same time rather than doing equity release.

It doesn't seem like a scam but there are potentially lots of issues, deprivation of assets if he needs care, stamp duty, capital gains tax let alone your own housing needs.

If you want to go through with it you both need legal advice.

pinkdelight · 23/10/2023 11:17

he said it’ll be a joint mortgage with my uncle and I.

So he's not even giving it to you, he's staying on it. Don't get involved in this at all. It's a load of potential aggro you really don't need and could get you in debt and in trouble and not get you a home. Your childcare fees won't be forever and you've got a whole home to live in with your parents not just a room. Stay on the housing list and make other back up plans for if that doesn't bear fruit - you could rent rooms off this uncle if he's so keen to help and needs extra money. But honestly it sounds like he's in shit with his remortgage and trying to rope you into the mire as you're in a vulnerable position. Thank him but no. Telling you not to ask questions over 200k+ is a very big red flag.

roibustea · 23/10/2023 11:19

Sounds very dodgy, especially if he's not answering questions. How is he planning to cover the mortgage? Would he be claiming housing benefits? If so, pretty sure that's fraud and pretty sure you would also be in trouble. If he's trying to avoid care fees think that'd also be classed as fraud, though not sure whether that would effect you.

MaggieFS · 23/10/2023 11:20

Say no. Anything else aside. Telling you to stay away because he knows more is a MASSIVE red flag.

forgotname · 23/10/2023 11:21

Sounds dodgy but also a lot of misinformation in this thread.

You can use child maintenance and child benefit as part of your mortgage calculations. I done it last week.

Speak to a free mortgage advisor

My suggestion is stay put and wait for a social housing, surely should be coming soon with 3 of you in one room. Have you not been offered temporary accommodation?

Ohmylovejune · 23/10/2023 11:22

I wonder if he has a mortgage coming up for renewal and is struggling to find any decent rate because at 72 they don't want to give him a mortgage really so he's stuck on SVR (or will be when it ends).

So he's coming up with daft ideas.

BouncyBallBall · 23/10/2023 11:23

If he is on the mortgage then he isnt selling it to you?
It remains worth £400k with a £230k mortgage
So if joint he would own £200k and so would you
So you end up minus £30k to start with and then you would have a massive capital gains tax bill

BouncyBallBall · 23/10/2023 11:24

Even worse if it already have a £230k mortgage on it- so he only has £170k in equity but wants you to pay £230k to buy that equity