Am I completely doolally??

[Kay00]

Mother in law currently lives (but is not resident) in France and now, after Brexit, she wants to return to the UK. She has pit her property on the market in France but it will likely take a while (years) to sell.

So my partner and I are looking into the possibility of borrowing more against our mortgage to raise the funds for a deposit to put down on a second property.

It would be a residential mortgage and MIL would live there rent free until she sells her property in France (we might sell at that point).

Looking at buying somewhere cheap (£100-125k) in South of England (Devon to Hampshire), so it will be small.

Its a huge risk for DH and I as we will be paying out for 2 x mortgages and we have to stump up cash for deposit and stamp duty etc! MiL has no savings and is in her 70s and becoming poorly.

I think you may have a problem with getting a mortgage, as technically wouldn't it be a buy to let? If so, the lender won't let you rent it out to a family member.

But I'm not sure because you also seem to be saying that you'd be raising the money against your own home, in which case you'll just have a bigger mortgage. Sorry I'm being a bit thick today :-D

I don't know, to me this has DONT DO IT written all over it, but maybe I'm just cynical.

How has mil been supporting herself in France and why can't she do that still to support herself now?
You're gambling a lot here, doesn't really sound like you have the means to do it. You're going to severely stretch yourself and it could all come crashing down.

She needs to put the house in France on sale at a price that will get a buyer quickly.
If it is priced at the right level, it will sell. Even in France!

Why does she need to live in a property that is owned? Couldn't she move into a rented property here? What income from pensions or other does she have?

Thanks for your replies.

@mumblechum0 my mortgage advisor seems happy that we can get a standard residential mortgage for the property as she would not be paying us rent. We will need to raise 15% deposit against our current house.

@plonque @mojomoon She has been living off her pension in France and has no other income, unfortunately the pension doesn't stretch far to cover rental prices. She owns her property outright in France and was very much living off the land until she got poorly. Its not that we don't have the means as we both earn well, but it is still taking on a huge risk... two mortgages and using our savings + equity on current house to fund deposit 😬😬😬

Don't do it. Look around for retirement flats / sheltered housing. You say that she is poorly. She would be better in a maintained building which is managed. If the water goes off or there is a flood she can ring for help rather than having to be responsible for repairs. Think carefully about what kind of lifestyle she is actually going to live. How does she spend her days now?

If she was "living off the land" then is the property suitable to generate a Gite / holiday rental income, which would cover her UK housing costs?

@growinggreyer Don't retirement flats and sheltered housing cost money? Unfortunately the council have said they are unwilling to help because she owns property in France. She's poorly but would be looking to move close to her daughter who is a nurse, so hoping that would help.

@senua yes, we have considered turning her property into a gite, but that requires a fair amount of maintenance and the income isn't necessarily stable. If her property doesn't see then we may have to go down this route.

As a family we have been struggling to find a solution, there really isn't an obvious one. We are happy for her to come and stay with us whilst she is in England (as she has always done) but she's getting tired of travelling back and forth, and in a post-Brexit world this will get quite complicated to do.

Thank you for all your help (and concerns)!

*a holiday rental not a gite... it's already a gite

Surely it would be simpler for you to pay rent on a place here for a few months until the property in France sells, then use that money to buy or carry on renting here?

Yes, they cost money but they don't cost a hundred grand! Look into what you can do that is sensible. You say it is a huge risk in your OP. Look around at alternatives and bear in mind that things can change quickly with elderly people.

@TheFlis12345

Surely it would be simpler for you to pay rent on a place here for a few months until the property in France sells, then use that money to buy or carry on renting here?

This is actually probably not a bad idea. Encourage mil to put the house for a realistic price so it's not forever and rent her a place.
No stamp duty, legal fees and searches or other associated buying costs, and then the thousands it'll cost you to sell it on in a couple of years
That's a fair few months rent covered, just in fees.
Is your mil going to reimburse you for all these costs when she sells up seeing as you're stumping up for her to live rent free?
She's definitely being very unreasonable if she holds out for years for X amount of extra money on the house sale while you've massively extended your finances to accommodate her!

I think stamp duty is higher for a second property and when you sell there is likely to be capital gains tax.
Is it not possible for MIL to obtain a mortgage against the property in France to buy a property in the UK?

@senua

If she was "living off the land" then is the property suitable to generate a Gite / holiday rental income, which would cover her UK housing costs?

don't. It is hard to make money on French holiday rentals, unless you are very lucky it has about 10 weeks rental a year, you need someone on the ground to problem solve, and you need to arrange cleaners etc.

It certainly won't cover UK housing. And Uk reisdents letting in France are now subject to tax which can be huge

Have a look at stamp duty on the purchase / taxes for selling on as well. I can’t remember what they are but there are some differences for second homes.

@TheFlis12345 you're right, this is a much simpler idea! I think the reason we stopped considering it is because of her two (large) dogs. She has considered selling them, but I'm not sure I have the heart to make her. I think renting is an option we can continue to explore, for sure.

@Plonque yes, the idea would be she would sell her property an re-reimburse us for costs incurred and we would either sell the English property (because she will have bought her own) or if she's settled then she can invest some/all of her money into the English property to reduce our costs. Any money she invests will be shared between her children on death as an inheritance, this would be a trust agreement.

Certainly renting is much simpler.

It’s a bit of an off the wall idea but is there an option to build an annexe for her at your house or at her daughter’s house?

www.rightmove.co.uk/property-for-sale/property-85754140.html
First floor although direct beach access for the dogs.
I do wish retirement properties would state what the conditions are regarding pets and what sort of services you can buy in for care.

I don't advocate this lightly but if she is in poor health and the funds only stretch to a tiny flat, is it sensible for her to have two large dogs?

Sometimes people's circumstances change, particularly older people due to health, and it would be better for the person and the dogs if the dogs were carefully rehomed to a suitable new home with the space and the energy for them.

And then yes, rent her a place - potentially sheltered or older persons block would be best. Much simpler and get the French house on the market at a slightly lower than market price to get a sale as fast as possible.

No way

Aren't retirement / O55s properties really bad value to sell on, though? You will never get your money back.

Prices in Southampton are very cheap, aren't they?

How ill and infirm is she? Eventually when she sells in France and buys here (or buys the property you have bought for her to live in) will she need to sell to fund care?

Honestly...how not to plan for your older age and leave your grown up kids with a big problem! Could she not have got settled status in france and just stayed there? How is the care situation over there?

Is it that big a risk? Interest rates are very low and monthly payments on a £85k mortgage won’t be huge especially if you can spread it over as many years as you can. Also could you come to an agreement where you and DP retain some % ownership in the property once the french house is sold? This would reflect the risk you have taken.

I’m not downplaying the investment but your MIL doesn’t sound in a great place at the minute. I think you’re doing a really good thing to consider this as an option.

If you have a good sized garden you could build a granny annexe, there are loads of companies online, much cheaper option than what you are proposing. Here’s a price guide.

Another note of caution - my in-laws place in France took four years to sell. Screwed up a lot of best laid plans. So don't overstretch yourself on the assumption it'll sell soon. Hopefully it will but these are hard times. Rentals and/or retirement properties seem to make more sense.

@MindBodyChocolate Thank you. We are trying to do the best thing. It won't be hugely expensive for us (well... it will, but we can afford it) but buying any property is a risk.

@sollasollew @ZaraCarmichaelshighheels unfortunately we only have a tiny courtyard garden, so no room to extend, and my DP is the only child she has that owns a property.

@RainingBatsAndFrogs This is my concern, i'm avoiding them as I don't want a property we can't sell hanging from our necks.

She's in her 70s, and not infirm but she lacks the energy she used to have and has had a couple of health scares in recent years. She copes well with her two dogs and would like to keep active, but her current position in France is less than ideal as we are unable to get to her in an emergency! I agree though... she could have (and should have) planned for her old age better. But here we are!

Would she consider selling it through one of those 'we buy any house' type companies?

Would need more investing but a quick Google shows there's some options such as www.webuyhouseseurope.co.uk/

Presumably they will obviously buy it under market value so will have a smaller budget over here, but sounds like it needs to be sold fairly quickly.

Could you remortgage and buy a share of her house? I don't think it's wise taking out a second mortgage, but it would be a way to increase her house budget with your support.