What to do with run down house?

[Rebecca9210]

My grandad is going into a care home. He has left his house in a state. It needs new boiler, new electrics, everything. Would you pay to have it all done up or sell it at a loss?

Assuming that you don't have to sell it, you'd have to do the maths very carefully.

You need estimates on what's it's worth that you, your DGF and your DSis all agree on.

I'd also do lots of research on what the house is likely to fetch once you've done the work, like others have said, we are going to be in a recession and unemployment is going up. House prices may go down.

You will also need quotes on how much the work is likely to cost. Factor in at least 10% contingency and also work out how much your fees will be and Council Tax, standing charges etc.

Unless you really, really want to live in the house, I'd do the cleaning up and sell.

Who owns the house? Grandad? Sister? You?

Why would it be sold at a loss? Is it now worth less than was paid for it? Is it mortgaged, so any money it was sold for would be used to pay off the mortgage?

If grandad owns it, does he still have capacity to decide what to do with it?

Who actually owns the house then? 'm a bit confused.

Check deprivation of assets- gf will be expected to fund his care.

We have the same situation with our parents homes .

Currently selling my parents home as it is. I don't think it would be worth the cost, time and effort put in to update it . I think home buyers would rather get a home cheaper and to be able to renovate to their own taste .

When we come to sell FIL's property we will also sell as it is .

Thank you everyone.
Me and my sister own a quarter each and my grandad owns half. He does not have capacity anymore

Thank you everyone.
Me and my sister own a quarter each and my grandad owns half. He does not have capacity anymore.

I'm so sorry that he's lost capacity. Who is in charge of his affairs? It there a POA or is a Guardian been appointed?

Like PP have said, you need to look at deprivation of assets, carefully.

How long have you and your DSis owned part of the property for and are there any mortgages or loans secured on the house?

@JiltedJohnsJulie

*Thank you everyone. Me and my sister own a quarter each and my grandad owns half. He does not have capacity anymore*.

I'm so sorry that he's lost capacity. Who is in charge of his affairs? It there a POA or is a Guardian been appointed?

Like PP have said, you need to look at deprivation of assets, carefully.

How long have you and your DSis owned part of the property for and are there any mortgages or loans secured on the house?

My sister and I have owned half for 11 years. We were left my nans half in her will when she died in 2010

My sister and I have owned half for 11 years. We were left my nans half in her will when she died in 2010

That's good then. Does DGF's have have to go fund his care?

Like PP have said, you need to look at deprivation of assets, carefully.

Can somebody explain this?

I don't see how deprivation of assets would apply to selling it without doing it up. You're realising the assets that your grandad has, ie half the value of the house he was living in.

It might apply to spending money on doing it up before sale, if you were using grandad's money to pay his share of the cost, and you didn't realise the full costs of the doing up in the increased sale price.

So what am I missing?

Do you have poa to enable you to sell? As long as he gets his half share towards his care it is not deprivation of assets. It was not clear initially who owned it or could legally make devisions on his behalf.

Well it obviously depends. How much will it cost you to do it up Vs how much value that will add.

If it will cost you £20k to do everything but it will only add value of £25k, don't do it. If it will cost you £20k to do it up but will add value of £60k, do it.

Let’s imagine this house is worth £200K.
Your GF owns £100K, you and your sister £50K each.
As your GF has gone into a home his £100K will be used to pay for his fees up to £25K.
If you want to buy the house outright you will need to pay your sister her £50K and your GF his £100K.
Did you think you and your sister would get the whole value of the house before your GF dies? Does his will even leave his share of the house to you?

In some areas doer upper houses cost almost as much as houses that don't need updating. It's probably not worth doing a lot of upgrading in a house that's never going to be lived in by you or your family.

How are you selling it at a loss? This would only occur if there is a mortgage on it snd you sell it for less than thr mortgage? Or if it is now worth less than it was originally bought for?

If there is no mortgage then you’re selling it for what it’s worth as it stands. It is not a loss v what it would be worth if you had done it up. Because you have not

So yes, you can do it uo but there is no guarantee that the value you sell it for will then pay you back the amount you spent on it.

@JiltedJohnsJulie

My sister and I have owned half for 11 years. We were left my nans half in her will when she died in 2010

That's good then. Does DGF's have have to go fund his care?

He has enough cash to pay for about 18 months of care

Fil had to go into a home and the house was not in a state, but very, very dated and needed rewiring, new boiler and central heating etc etc.

Re-doing the house would have been a)£££££ and b) require project-managing which was difficult then when you’re not on the spot, but as for now!

Also, as others have said, 50% of the value of that house is your grandad’s and will have to pay for his care. And you cannot “reserve” his portion to pay for improvements from which he is not going to benefit.

Also you will need power of attorney to do anything. You cannot sell someone’s house without authority.

@Rebecca9210
If he has gone into a care home, it will be possible to sell the house but his 50% share of the proceeds will have to go to him until he dies. If you try to buy his share of the house at less than market value now it will be considered deprivation of assets and you will find yourself in very hot water.
A friend of mine has just lost her father. He went into a care home 3 years ago, expecting to live maybe a few months. His savings were all used up on fees by the end of the first year. Instead of selling his house, of which she is the sole beneficiary, she rented out his house and elected to pay the balance of his fees herself from her savings knowing that when he died the whole value of the house would be hers.
She spent about £20k in total and the house is now on the market for £50k more than it was valued at when he went into care.

Are you legally allowed to sell his half..if he has lost capacity does someone have authority over his affairs.

The share of the house may have been left to gd until his death then you and your dd inherit her half, have you seen GM Will.

If you try to buy his share of the house at less than market value now it will be considered deprivation of assets and you will find yourself in very hot water. Yes, because he will have "given away" some part of his assets and made them unavailable to pay for care.

I'm not sure about the "hot water" bit. He will be assessed as if he still had the portion of money that he "gave" to you by letting you have his share of the house cheap. So once his remaining funds have run out, he'll still be treated as if he still has the money that he didn't get because he sold it to you at below market value, so someone (you) will have to find that money for him.

But you would be in hot water if he didn't have capacity to make that decision and you were managing his affairs - not because it was deprivation of assets per se, but because you were using his money not to his benefit.

Hello. Everyone. Thank you for your advice it is really helpful. My grandfather has enough cash to pay for his care. His house will unlikely need to be sold. I also wouldn't want to see it unless I had to u til her died as it would not seem right. My query is, in the future do I sell it as it is or do it up. I am asking this now as if I decided to do it up I could do this over the next year whilst he is in a care home, rather than rushing to do it all at once. My other query is when me and my sister inherit the rest of it, would it be best to sell or do up and keep. I live in a 1 bed flat currently and could move into it. Or would it be a money bit and I would be better off buying somewhere else. I have never had to do anything big like this as my flat was all done up before I bought it. I just want to be financially and mentally have made a decision for when the time comes as it will change what I do over the next year

I think you’d struggle to be able to sell it is your GF doesn’t have the capacity to agree to the sale I’m afraid. You say you and your ds own 1/4 share each, but are your names on the deeds?
It may be better to agree with your ds to make the house decent enough for you to live in now, as cheaply as possible, until such point as you are able to sell it. I’d expect her to pay half for the repairs, and I’d expect you to pay the going rent to her and your gf. So if similar houses nearby rent out for £600pcm, you pay £300 to you gf and £150 to your ds. The when the house sells, it would be an equal split between you and her (assuming your gf has died)

It partly depends on the house, and the local market.

It looks like selling it as-is, isn't really an option soon.

If it's not too old a house, and a modest sort of area where a fairly standard, refurbished house would sell, then you could do it up, looking at houses that have sold recently and maybe creating a kitchen diner, downstairs loo etc so it has mainstream appeal. Then it would be nice to live in but still sellable and you'd probably cover costs.

If it's an old or complicated house, or a fancy area where people are going for glass extensions, £30k kitchens etc, nothing you do will please a buyer. In that case I'd deep clean and maybe paint the main rooms, but otherwise live in it un-improved. Better a house is lived in rather than left empty, it will be in a better state to sell.

If you're selling it soon (which you're not) then best just to sell it, as say £30k of renovation doesn't usually translate into £30k on the selling price. The people who do manage to see all their doing-up costs more than paid for by increase in selling place are builders who are paying trade prices for goods and have reduced labour costs, and accomplished diy-ers who can do most of the work themselves.

If you're not selling, there are various costs to think about. An unoccupied house may have a period of grace but often is liable for double council tax. Insurance is more expensive because there isn't someone in the house to take early action in case of problems, and usually requires you or someone else to inspect inside and out every two weeks.

How long do you think before you are in a position to sell it? The average stay in a care home is around 3 years, less in a nursing home, but of course people can be in a care home for a great deal longer - 12 years, possibly. If you think it will be a long time before you want to sell it, you will need to do work on it to maintain it, and keep the garden tidy, etc. If you do maintenance on it, in my opinion (as a layman) it's reasonable for your grandad to pay his share, because it's necessary maintenance on his asset. I think you could argue that for boiler replacement and re-wiring. But I wouldn't use his money for anything that's not strictly necessary for maintenance and wouldn't therefore benefit him. You might want to take professional advice on this.

We can't answer whether it's best to sell up or keep. That depends on such things as - would one of you want to live in it, would you want to rent it and how much would it cost to bring up to the higher standard required for renting. How big a house is it? - if it's a 5 bedroom pile, and you are a single person on an average sort of wage, you might struggle with ongoing costs; it it's a 2 or 3 bed, it might be a very sensible move. Nowadays it often costs more to rent than you would pay on a mortgage, and you have a house at the end of it.