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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:
BrimfulOfMash · 23/10/2023 11:24

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.

This is so dodgy. And so many pitfalls. So many ways in which you could be left high and dry and far worse off… and with no possibility of escape from living in one room.

OP, your need for high childcare costs will reduce. Hopefully your salary will increase over time. It might help if your parents were to evict you…

But whatever you do steer clear of a scheme that ties up your money for ever but which your uncle can’t/ won’t be transparent about.

BouncyBallBall · 23/10/2023 11:25

Are you eligible for help with childcare through working benefits?

Ginmonkeyagain · 23/10/2023 11:25

Crikey - so potentially uncle has got to 72 and still owes £230k in mortgage debt. Sounds like there is a lot going on here financially and none of it good. Given his age he is likely to have paid a lot less than £230k for a house that is currently worth £400k.

DelilahBucket · 23/10/2023 11:28

Without a shadow of a doubt OP, you would not get a mortgage for this. You've got an undervalued transaction (selling it at less than market value), gifted deposit, and the person selling it wants to live there, and therefore will have a vested interest in the property. No lender would touch this in a million years.
And that's not even looking at whether you have a high enough income.

BouncyBallBall · 23/10/2023 11:37

Plus it would need to be a buy to let mortgage with a much higher deposit typically. All rental income (the amount he pays to the mortgage is taxable)
It can be hard to get a BTL mortgage if you don't already own a home
The interest rate is typically higher as well.

Totalwasteofpaper · 23/10/2023 11:39

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.

Preface: I am saying this with your and your children's interest at heart. If I thought for 1 second you could do this successfully and it would actively benefit you I'd say go for it...

This is a shit deal....

He says I should just trust him and stop asking questions as he knows more than me.

If this isn't a red flag god knows what is.

No not do this.

Tell your uncle if he wants to help you let him leave you the house in the will. Keep saying this to him and do not engage any further.

Call the broker and say you aren't proceeding, email and tell him the same and state clearly any signed documents he may receive in your name from any other parties are not valid/ not signed by you.

Do not go near this strange scheme with a 10ft pole.

Separately

  1. it will never be your house (ie. you are the sole owner) if he is named as having an interest in the property, which he must be as a condition of Issuing a joint mortgage.
  1. Who the hell is giving a 72 year old a mortgage and who is going to agree to a 70something wife of that man being a guarantor for the co-owner. You are most likely going to be on the hook for a debt you can't service of a house you can't live in.
  1. The tax you will incur on "rental" and capital gains will be nuts.
  2. At best it sounds like he is trying to do equity release but honestly... none of this adds up
Sugarfree23 · 23/10/2023 11:39

He's treating you like a daft wee lassy, don't be fooled by him, nobody will look after your back like you do!

NotDavidTennant · 23/10/2023 11:41

Massively, massively suspicious. It sounds like he is not even actually selling the property to you, but just adding you as joint owner so that you can be named on the mortgage with him. Probably because he is now too old to get a mortgage in his own right.

The only upside here is that you would stand to gain some (or all) of the property when he dies. But that could be decades away if he has a long life. And there are lots of ways for this to turn sour in the meantime. Not to mention that you will be off the housing list and stuck in a single room for years to come.

pontipinemum · 23/10/2023 11:41

Don't do this. It all sounds very odd. From a finance POV, I'd be very concerned. Are you going on the mortgage, will it be fully transferred into your name? If he is selling below MV you are liable for CAT.

He will remain in the property until he leave? Does that mean die? He's 72, my Gran died at 72, but her mum died at 96 so it could be a lot longer than 10 years.

But even if it was 10 years will you stay in a single bedroom with 2 DC for 10 years.

I would wait until a better option comes up

tabulaisrasa · 23/10/2023 11:55

Dear god, no. Just no.

PickledPurplePickle · 23/10/2023 11:57

He needs to consult experts before he sells it to you at less than market value

There are issues like deprivation of assets, stamp duty will be payable on market value not the reduced value, if there is any capital gains tax issue, this will be on market value

ShagratandGorbag4ever · 23/10/2023 12:02

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.

Anyone who says 'just trust me' is not to be trusted.

LIZS · 23/10/2023 12:05

Where has uncle been? Might he not be such a good lending risk and want to include you to get the financing. Can he really afford it long term? Not sure what the benefit to you would really be, you would still be beholden to family.

Sugarfree23 · 23/10/2023 12:16

It doesn't matter where he has been. What matters is he's trying to add her to the mortgage (and presumably the deeds).

Right so he's trying to 'sell' the Op half a £400k house for £260k he'll still own half for £140k.

But Op can't live in the house because uncle (and possibly auntie) want to live in it.

When Uncle dies or needs a care home what happens to his half of the house?

Saschka · 23/10/2023 12:19

PurpleRayne89 · 23/10/2023 08:59

My uncle is 72. He will live in the house and we will remain where we are which is with parents in my old room. We don’t have the capacity to meet a mortgage requirement for £230k but he said he’ll make it work! We get on fine I guess but he did mention having some issues with his mortgage company in the past. Do you think he’s trying to scam me? I’d be very disappointed if he were.

I suspect he is trying to avoid care home costs, but he won’t if the council think this is a scheme to evade paying…

Thus all sounds like a terrible idea, and honestly I wouldn’t do this. Too much potential to blow up in your face.

ISeeARedDoorAndIWantToBreakIn · 23/10/2023 12:24

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

This is the part that tells you it’s a very bad idea. That and the fact that you still wouldn’t get to live in it for another 10 years, which doesn’t help your current living situation.

With the “stop asking questions”, is there cultural pressure that as a female you shouldn’t query what a man says?

PickAChew · 23/10/2023 12:26

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.

Quite. The only response to this is "bugger off. I wasn't born yesterday."

Marmight · 23/10/2023 12:44

Your uncle sounds like a cunt who is taking advantage of your vulnerable position.
He is dangling a carrot of your own property in 10 years which will never happen.
Due to his age he needs to remortgage and doesn't have the income needed.
If you are both on the mortgage, you will be both on the deeds.
And why some weird £230k vs the valuation of £400k. Is that his o/s mortgage amount??
Thank him for his weird offer and walk away.
He isn't doing this to benefit you. The only winner will be him

bombastix · 23/10/2023 12:49

Needs a carer and has run out of money himself.

You stay on the housing list unless you fancy these extra responsibilities

You didn't fall out of a tree, don't fall for this

Pinkdelight3 · 23/10/2023 12:54

my aunt will be a guarantor.

What aunt - his wife? This is all too fraught with issues and not in your interest. Decline and have nothing to do with his housing problems. You have enough of your own and combining them is not going to help you.

plumtreebroke · 23/10/2023 12:57

Get him to sell it to you at a discount in ten years and leave it to you in his will he's not a young man he may not be around in ten years.

It's a very generous offer (on the surface) but a bit of a minefield you would want to talk to a solicitor about all the ramifications. Stamp duty, capital gains tax, rental income, what happens in the event of death, other claims on the house, affects on potential benefit payments. I don't even know all the questions to ask.

Cosyblankets · 23/10/2023 12:57

The only thing i can understand about this is that it looks dodgy

Pleaseme · 23/10/2023 12:57

My mortgage company (Santander) took child maintenance payments into account as income. I had to show them proof of 6 months of regular payments into my account. They also took child benefit into account but not UC. I work full time but still qualify.

Perhaps your uncle no longer qualifies for a mortgage due to his age? He has to repay the bank the outstanding amount £230K or move and doesn't want to/ can't afford to. I'm assuming at your age you can get a long mortgage so repayments would be lower etc

It's not actually a bad deal if you had solicitors go over everything and organise it formally. Problems could arise such as him needing long term care, he could become ill enough not to move (dementia etc.) It's a gamble and if you had a property portfolio I'd suggest you take a punt but not if you are homeles and living with your parents for the next decade!

Ginmonkeyagain · 23/10/2023 12:59

Guarantor mortgages are not common. Those that are will require well off family members (usually parents) with enough income to take on the mortgage if the borrower defaults. If your aunt has that sort of income/savings she could surely just apply for the mortgage herself?

Nevermind31 · 23/10/2023 13:00

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.

Shut up and trust me…. Run a mile. This is not to benefit you at all.
do not sign up to a joint mortgage- you cannot afford it.
do not get taken off the housing register!