Buying a house short term....let me explain

If anyone is buying the property for the first time, then it is difficult to determine which strategy to follow. Most of the real estate agent recommends to buy a home, if anyone is planning to live around 5-6 years. So that when it comes time to sell, one must not lose money by not being able to regain the initial costs of that property. One of my friends recently purchased Long Beach NY short sale with all the facilities like parking and water view.

I would buy the house for her. If things go wrong and she falls short on money, you can always sell it again, with costs of course, but it seems that wouldn't be the end of the world for you financially. I assume you have investigated a mortgage for yourselves as there will be restrictions due to age for most mortgage lenders. But assuming that has been agreed, there will be no stamp duty to pay (as some have intimated). Capital Gains Tax could be an issue, but if you buy in joint names with your husband you would not pay any CGT unless the house rose in value by more than £21,000 in the year. I am assuming all would be settled within a year. And once she is in a position to buy the house herself, yes, there will be some fees to pay, but if you use the same solicitor a second time and it is fairly soon, they shouldn't need to re-do the searches and the fees should be fairly low.

This is a lovely gesture to make to your DIL and her kiddies, and I hope it works out well for you all. They have suffered a terrible tragedy and need all the help they can get. Yes, things can go wrong, but they have already gone badly wrong for this young mum, and she deserves a helping hand. You won't regret doing this for them. It will give them a new start in life that seems to be so important for them right now.

As an aside - I think it's brilliant that bytheways SD has seen a place she thinks she could live in. Brilliant that she feels ready to move on with her life and be independent. It could be so much more difficult if she was needing emotional support and didn't want to move.

Just wanted to confirm that Housing Benefit isn't payable for mortgages. The rules have changed. The DWP now pays interest on mortgages, but in the form of a loan. which has to be paid back.

Also, as somebody else pointed out, don't forget the Capital Gains Tax implications.

A solicitor's fees would be well worth it - just so that you can talk through all the implications.

This is the current DWP position on renting from close relatives:

Housing benefit: renting from family

Find out if you can claim housing benefit for rent you pay to someone in your family.
Living in the same home

You can't get housing benefit for rent you pay to a close family member you live with. For example, if you're living with your parents and paying towards household costs.

People who count as close family members are your:

parents or step-parents
child or step-child
sisters or brothers
half-sisters or half-brothers

Partners of these family members also count as close family members.

Living in a separate home

You can get housing benefit if you rent a property from a member of your close family who lives elsewhere.

You can only get housing benefit in this situation if the council treat your tenancy as a commercial one rather than an informal family arrangement.

The council will want to see proof of your tenancy, such as a contract or evidence of rent payments.

The council may also want to see other evidence of a genuine landlord-tenant relationship. They might ask whether your relative took a security deposit or provided you with a gas safety certificate before you moved in.

The council will refuse your housing benefit claim if it believes that your relative would not evict you even if you can't pay the rent.

bytheway, I can totally understand the impulse to help, to try to make a horrific situation better in any way you can. I can also understand the pressure from sharing your home. You are all grieving and are all impacted, if differently. Other posters are far more knowledgeable than I about legislation. I can only speak from instinct which is hasten slowly, seek advice jointly with your husband and agree together before taking any action. Local rental close to your home is well worth considering to allow you all some space and allow your step daughter and her children to be supported but independent. Please do seek advice.

I haven't had time to read all the posts but thought you might want to hear about our experience with a similar situation although unfortunately my SD's husband is still part of the equation. We bought a house for them whilst SIL waited for a compensation award which was owing to him. The idea was that we bought it and as soon as he got his money, he would pay us a deposit, get a mortgage for as much as he could as he would be a fairly low earner and rent the rest of the house off us at under market rent. Within a short time of moving in, it was obvious he wasn't going to be getting as much money as he'd thought nor was he working. We agreed to rent the house to them until they were on their feet and let them buy it when they were ready with a good discount for any "improvements" they had made.
At first they were so grateful for the opportunity to have a nice house in a nice area but it was amazing how SIL started finding fault in everything. His improvements were disastrous and after listening to him making derogatory comments, flitting from one job to another in between being a student, starting and giving up courses, cheating on my SD, etc., we realised that we were on a hiding to nothing. They moved out last month and the relief was immense but when I went in to see the damage he had done to that beautiful house I just cried. My OH didn't want to make a fuss as he thinks his DD has enough on her plate and says she already feels terrible about it. Now DIL wants his discount and I can see a terrible row brewing. I love my SD greatly and treat her children as my DGC but I must admit to feeling somewhat jaded after this. We have at least 2 months of work before we can let it out again and have already spent more than a couple of thousand pounds on it and we are only part way through the work.
OP, maybe your SD is more disciplined but do be very careful.

paddyann I must admit to thinking along the lines youu wrote BUT that is not what bytheway is asking to be advised on here. Imagine for a moment how the widow and her children are feeling right now, it's been a short time and uncertain time as well as terribly sad. If OP is in a position to help with them getting their own home then it may actually help them immensely until they can permanently have their own home again. My concern for you OP would be that it is such an enormous financial step you really should seek proper legal advice both for yourself and for the future wellbeing of your SD and her children.

Don't buy the house yet. Go and see your local housing advice centre and ask to speak to a qualified housing officer.Get an appointment.

Your stepdaughter is an adult - and if she has children under 16 (or in full time education) who she is supporting, she should not be seen to be intentionally homeless under housing legislation, and should get some help to access some temporary,acceptable! and affordable housing for rent until she has sorted out the sale of her property.
Even though she has chosen to leave her home 200 miles away, she could argue that 1)this was necessary as she has been offered and accepted work in your area by her employer 2) she needs your/your husband's practical support now she is a widow with children to be able to cope with its demands 3) this will be easier if she and you do not have the strain of sharing the same (overcrowded?) house 4)the house which she owns is now unaffordable for her now she is on her own. (Use this last argument with caution - not so easy if mortgage now paid off with life insurance) but remind the adviser it may take some time to sell.

You yourself need to say very clearly that while you and your husband were happy to help for a limited period the ongoing situation is now affecting your health (stress, depression?) and you have had to ask her to leave.If you can get a note from your doctor to support this, do so.Do NOT go 'soft' at this point in the interview. If it looks like your stepdaughter and children could be roofless, the housing department will be in a much better position to help her.

If she did not have the house to sell, she could argue she was'homeless at home' and be entitled to be housed by the council as a 'priority need' applicant because she and the children are living in your house, especially if there is overcrowding. As it is, the situation is temporary. But emphasise to them very strongly that she has no buyer, it could all take a long time to sort out, and you are at the end of your tether.She will still be able to get 'advice and assistance'. Depending on her financial circumstances, this could mean renting somewhere affordable privately (they can advise on/ensure it is a fit place for occupation) or being found some council/housing association accommodation to tide her over. She may qualify for housing benefit on either( there is a 'cap' on this).

It is quite 'reasonable' ( a legal term) for her to wish to live in the area where she has work to support her children. It is also 'reasonable' for you not to be sharing your home with her and the children for an indefinite period, so don't feel guilty.And if she is in rented accommodation this way and you have not stretched yourselves to purchase another property you may be better able to help out from time to time.

Bridging loans are expensive and if the house does not sell she/you could be in a lot of financial trouble - try this way first!

Good luck, and stick to your guns!

Seems this could create many problems in foreseable future. I go with others that suggest renting her a place until hers is sold, housing market is slow at the moment as it's to soon after Christmas come middle of February it will pick up.

Ana, Paddyann as an aside, compared our lack of compassion, as she saw it, for this family, with another entirely different thread where someone had a parking problem. She seemed to think this showed that as a group we had no concerns for wider world issues.

I do not follow her logic, but I admire her saintly indifference to the minor problems of life.

I think this thread has shown compassion and understanding for the OP, including an understanding that there are no simple solutions to coping with the tragedy that has engulfed her family. If there were she would not have needed to make her original post.

Oh, sorry, I've just read Paddyann's post again see what you both mean!

Parking? Where on this thread has that become an issue?

I think there is a lot of compassion and practical help on GN and it is also a place where anyone can come and grumble if the neighbour persistently parks over your driveway! (and ask for practical help about it too.)

Being concerned about the wider world does not make the immediate everyday problems people have to deal with go away.

Paddyann, I also think you live in cloud cuckoo land to think a grumble about parking means a lack of concern for wider world issues.

Are you really suggesting that you are so taken up in aiding the Syrian refugees, or whatever, that all the other minor inconveniences of life pass you by? I would like to be a fly on the wall the next time you need to see your GP and have to wait in pain for three weeks to get an appointment, or when the CH breaks down during a cold snap and the repairman says he cannot come for at least three days.

I do not think people are money minded and lacking in compassion, it is just that we can see that an unwise action at a time like this can make a bad situation worse. Anyone can say how compassionate and caring they would be when not actually faced with the problem

It is not easy having 3 extra people in the house, all recently bereaved and two of them children. Especially of you are the step mother and it is affecting your health. I suffered the loss of a close member of my family and life was sometimes tense after the event, even though we were a close family and we all lived independently. Grief affects all of us differently and it is difficult to reach out to other people and be understanding when you are consumed with grief. We had our DGC and their parents staying for a week at Christmas and even with a big house, all the noise and clutter was overwhelming - and we did not have to deal with bereavement as well.

Bytheway and her husband have already shown their compassion and care for their DD/DSD by providing them with a home after this event and they are now trying to help this little family further by getting them settled into a new home.

Many of the family problems that we get asked advice on on Gransnet arise because people rush into helping family or arranging things with family without thinking through the consequences, or relying too much on family loyalty.

Legs55 I think you are mistaken about all adults living in a property being taken into account by the DWP. I believe it is only partners who are included, going by my past experience.

Paddyann, you live in cuckoo land. If you are so well off that you can afford to take a risk with £80,000 then good for you. As for gladly sharing your house with another family then good luck with that, I've done it and it's not funny.

Getting proper legal/financial advice is crucial. My deepest sympathy for all involved in this sad event, it is hard to make decisions after the death of a loved one even without these sad circumstances.

Some very helpful advice on here. Beware Capital Gains Tax, SD will not get Housing Benefit unless she rents, & even if she is working getting & paying a mortgage may not be financially possible.

If she's not working & living with Parents again she may not be entitled to anything as DWP take account of all adults residing in a property.

I hope this situation can be resolved but fear there is no quick fix.

paddyann I disagree with you that Gransnetters are lacking in compassion. If you look at other threads you will see that sympathy and support are generously offered.
The OP on this thread was asking for practical advice about house-buying in a particularly difficult family situation. I feel sure that the information about the death of her step-D's husband was given to put the dilemma into context, not to elicit pages of virtual flowers and so on, comforting though those might be.
For what it's worth OP my advice would be to help your SD to rent while she's selling her house.

This is very sad, my condolences.

I have to agree with the posters who say do not go into this for the short term for almost all the reasons stated. Houses/properties do not move that fast. Then, once agreed... I am appalled at how slow conveyancing takes in the UK. AND the buyer can back out.

This just happened to my stepson who is selling one of his buy-to-let properties. At least he has sitting tenants, so it's back to square one. He wanted to money to put an addition on his own house.

Also, even though this is your husband's child... she is still an adult who has her life ahead of her. What if she moves a new partner in whilst expecting you to pay the mortgage? What are her 'other' debts that is affecting her credit?

Be very careful... that is taking on a lot of debt in middle age. And if the property is £110k... are you putting up the down payment, too? That's £30k then straight out of your pocket.

I hope she manages to sell her own house very soon - spring is coming and it is a good time; people will start looking now. It may even be better to reduce the price a bit to make it more attractive to buyers - that could be less costly in the long-term and perhaps you and her father can help her out with a loan/gift as a bridging loan as you will not be paying out for fees yourself.

I would also want to help in this sad case, and your idea sounds like the right way to go, but I would strongly suggest going to a solicitor or some other professional advice service to see if the other ideas promoted here would be a better option. Good luck.

bytheway

A very interesting thread and I feel for you as you agreed to an arrangement in a spirit of pity, which with a little more foresight you probably should not have done. It was always going to be hard for you while for your husband its his own DD.

Two months isnt actually very long to sell the house. What are the reports back, is she on the estate agents backs making sure there are plenty of viewings? Is the house displayed to best advantage? If not could you go down with her and give the house a makeover (as per TV programs), declutter arrange for any repairs, cut the grass, clean the windows, maybe even a little redecorating?
Is the house realistically priced?

I think this could also be done in a context of telling her that when she was invited to stay it wasnt intended to be completely open ended, and suggesting that if there is no buyer in the next month then rented might be a better option (for all of you).

I wonder if perhaps she prefers living with you to being alone (understandable in the circumstances) and isnt in any hurry to sell her old house.

I think posters are trying to help in a practical way and pointing out the pitfalls which could cause more stress on top of the stress of bereavement and all living together.

I don't think it would be a good idea to buy a house for the short-term or for the DSD to rent her own house if she wants to let it - people may be put off buying if they think there is a tenant.

Sometimes when everyone is upset (as obviously they all are) then it is a good idea to ask advice from people who are not emotionally involved and may have a clearer picture of the best way forward.

I find it hard to understand the number of people on here who are more concerned about the OP losing money than her SD losing her husband and the children losing their father.I feel as if I'm landed on some strange planet where money is king.Nobody I know would even think about it twice in this situation,mind you ,most of my freinds would be happy to keep the bereaved wee family under their own roof as would I.Surely at a time like this she needs as much support as possible ,however inconvenient extra people in the house are .I think its time I bowed out of this Gransnet page,it has been a bit of an eye opener though reading about others first world problems that cause such distress,eg .parking, but a bit low on compassion where its really needed.I wish you all well in your daily struggles