Buying a parent’s retirement flat at market value for care fees

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My DF needs to go in a care home. He has limited savings. Certainly less than 23k threshold but some. His retirement home is 'worth' say 100k for example.

I would like to buy it for myself. The proceeds will of course go to the local authority to pay back any fees owed and or due in the future.

It is a retirement home which can be notoriously hard to sell. I understand I have to buy at market value and im fine with that but given the current market how can i know that im not overpaying or indeed underpaying unless perhaps he gets an offer from an unrelated buyer? Someone may think its only worth say 85 to them. I don't really want to pay 100k for it if there's no hope of achieving that on the open market.

Has anyone else been in a similar situation? Will it just come down to a R.I.C.S valuation and hope they're in line with the current downtrend in market values.

Sorry for the long post

If it’s a good area and it suits you then I would go for it - you are helping him now rather than in 20 years! as you say many do indeed sell at the right price- ( ie cheap) many that don’t have simply not had a penny spent on them andare very dated, and/or are in poor areas with little demand or often very overpriced for what they are or have ludicrous service charges - we’ve got several blocks in Bath that are £10k a year - I would avoid anything like that - however nice .

Thank you, thats very helpful.

Yes i need advice on how to protect what I give my ds, be that buying somewhere for him now or leaving in a trust etc etc or any other scenario I've not thought of yet. Im just in the early stages of thinking about it

Df has dementia and its a fairly recent decline that has meant he really needs more care than me and my siblings can provide or carers going in even.

Yes there are gorgeous flats for sale nearby but the charges are 1000pcm. That includes a daily carer, restaurant, cleaners etc so cheaper than a care home but yes eye wateringly expensive on the face of it but they may well suit some.

The area is nice, 5 minutes from the sea front and shops and family close by...that can look after the dog whilst im out living my best life 😂

Yep we’ve got a fantastic development about 8 miles away with lovely indoor pool, gym, great cafe/restaurant, beautiful grounds, hairdresser , bar, tons of activities, -fabulous funky flats too and they are about £1000 a month service charge but always seem to sell well as people are buying into a total ‘lifestyle’ and in a very attractive town too - wheras we’ve got another block here in Bath that’s in a fantastic central position, architecturally amazing and the flats are big but similar service charge costs with few facilities at all , no parking , look dated and they totally struggle to sell unless virtually given away .

How long is the lease on it? That’s a significant factor

About 60 years but I'd look to extend it at some point. I know the cost of extending and have factored it in but that obviously affects the current value so thats why I want to be reasonably sure im not paying over the odds for it to start with. But it has to be a price that the l.a will accept is reasonable..

Sounds like a reasonable plan to me - they are harder to sell for higher price, so you want to buy it now for a price which reflects that.

Agree with PPs that you need an external valuation (and explain you want a realistic price).

As you have Power of Attorney, you would have to seek the permission of the Court of Protection before you could purchase the property.

You can usually borrow money at competitive rates of interest from the LA to pay for care when the person runs out of savings, so why don’t you place it on the market and see what you get offered and is proceedable. Then you could offer to match that.

Thankyou for this info

Yes I imagine thats the sensible way to go though it could take a while for any offers and then id have to outbid someone who is genuinely interested.

Its a bit of a minefield. There's nothing else out there at the moment that i'd want to consider. I like the layout and size and its ground floor and takes pets. I don't like some retirement flats that have the kitchen and bedroom at an angle..like a triangular shaped kitchen...feels really like its for old people 😂

I would get a formal surveyor valuation in these circs, both for the council and CoP.

As you have power of attorney you have a massive conflict of interest. As attorney you are legally bound to get the best result possible for your father. I would suggest that the only way you can proceed with this is to resign as attorney and to get legal advice about your siblings continuing as attorneys, otherwise you need to sell the flat on the open market for the best price you can get, which will give you a guide as to how much to pay for a similar flat in a separate transaction.

So you're saying i cant buy it even at full market value? The proceeds will benefit the local authority ultimately, not my DF. I dont want to undercut anyone, just pay a fair price. I would have thought a legitimate sale at FMV would be ok for the l.a if i have 3 valuations and or a R.I.C.S valuation.

The local authority and the court of protection will need to know that there wasn't anybody prepared to pay above valuation. They may accept that if the flat has been marketed for a period and not sold, that you could buy, but they would expect to do their own valuation, in case you're low-balling. Full market value in any case is what somebody is prepared to pay, valuations are just guestimates.

I woukd get some legal advice on this -think you might have to be prepared to put on market for 3 months though at official valuation and see what offers you get , unless someone totally trumps what you woukd offer though to a large extent the ball I woukd have thought is in your favour as you might be ordinated to offer more ! Unfortunately I think it’s the care costs being involved that’s complicating it as the council will want it to be covered off without help for as long as possible rather than you just buy his flat cheap - which is totally understandable to be fair

I could be mistaken but by holding POA you have to act in best interest. A sale on the open market would be as the local authority couldn’t then say you have purchased for under the market value. These flats are very troublesome to resell. Personally I would get rid instead of thinking you will buy it.

Worse case scenario you buy it and then in next few years you die before your child or children are the age to be allowed to live their ask yourself what would happen in that scenario. They likely then have a hard property to shift but tied to paying for it until it sells not allowed to rent it out in other words an albertross around their neck. I do remember a thread about this the OP had inherited a retirement flat but was too young to live there. It didn’t read like a fairytale.

Unless you want to live in it, don't buy up. Just sell it.

I think i will speak to the person who will be doing the financial assessment and get their opinion. There's no agenda on my part. I'd like to buy it to live in it and am fully prepared to pay market value. Its just establishing what that true value is unless I just go with the average of 3 agents then there can't really be much argument I'd have thought. I may also need to go through the court of protection too I suppose. Im a rightmove addict and there really is nothing else on the market that is a better option location, layout and price together with allowing pets. I could obviously buy something for twice the price but then that doesn't help my DS

That is a consideration of course but I feel most places will sell at the right price. People have to live somewhere. Yes the maintenance is a factor but there are flats on the open market where the maintenance isn't much less tbh. Obviously I can't know for certain that there wont be any huge hikes in the cost but as I mentioned previously its just about to get a new roof, fire doors and decoration.

Could I leave my property to a charity or housing association or something? Semi serious question 🤔

Check out this BBC report on retirement properties.

https://www.bbc.co.uk/news/articles/ckgykp79ezyo

A quick Google shows there are a lot of concerns.