Care home fees - what to do when savings run out but money tied up in property/pensions

[Maria83]

Hello,

Looking for a bit of advice about paying care home fees. My mum luckily was pretty savvy with money, and has some savings as well as a buy to let property (which was rented to a friend), as well as her own house. I'm in the process of clearing her house to rent it out (which I posted about in another thread).

The buy to let property has about £100k equity, but it has been on the market for about 6 months and is simply not selling for some reason. I had thought it would sell quickly and we could use that money to pay for her care while getting the house ready to rent.

However, now her savings are running low (I think we have enough for 12 weeks). However I'm worried that we will run out of cash before the buy to let house is sold and before we've managed to rent out her house.

Has anyone been in a situation where they don't have the cash readily available to pay the care home, and what did you do? Many thanks.

 

[nitram]

Does the buy to let currently have tenants?

 

[Maria83]

Does the buy to let currently have tenants?

No it's empty, but the mortgage is interest only and is a whopping £800 per month at the moment which is eating into mums pension. I've thought about renting it out, but that would only cover the mortgage rather than free up cash to pay the care home fees if you see what I mean?

 

[nitram]

Have you considered having it revalued and maybe reducing the asking price?

 

[try again]

No advice. I sold as soon as I could. Too much stress renting out.
Have you the money to pay for her care and reclaim at a later date?
Some homes don't accept the 12 week disregard(?delay) when there is a property to sell.
Is renting really the best use of her assets? It doesn't sound like it is in this case

 

[Maria83]

Have you considered having it revalued and maybe reducing the asking price?

Yeah we have just reduced the asking price and a few more viewings booked in so fingers crossed!

 

[nitram]

Are you marketing it as rental opportunity or just a property?

 

[Maria83]

Have you considered having it revalued and maybe reducing the asking price?

Yeah we have just reduced the asking price and a few more viewings booked in so fingers crossed

No advice. I sold as soon as I could. Too much stress renting out.
Have you the money to pay for her care and reclaim at a later date?
Some homes don't accept the 12 week disregard(?delay) when there is a property to sell.
Is renting really the best use of her assets? It doesn't sound like it is in this case

Thank you, I'm just looking into different options and getting an idea of how much we could get by renting. I figured I may as well get it cleared as will need to anyway if we sell it. Hoping to speak to a financial advisor who specialises in long term care planning. Like you say, we may well just end up selling to avoid the stress. We've got enough savings for about 12 weeks care and a bit more if we cash in a small pension pot (but again this wouldn't be the best use of it due to tax).

 

[Jessie5]

Hey, another thought is you can apply to your Mum’s local authority for deferred payment. Whereby they pay your Mum’s fees until the property is sold. The loan is secured against the property. You pay interest on the loan and there may be an admin fee. To apply your Mum needs to be down to less than £23,225 in savings. Worth exploring whether you can do this against the rental property, or whether the loan has to be against her actual home.

https://www.carehome.co.uk/advice/deferred-payment-agreements-to-pay-for-care-home-fees

 

[canary]

I just thought Id clarify that if you go down the deferred payment route (I dont actually know if its possible in this case) and have to take out a loan on her main home, its doesnt mean that that home has to be sold to pay off the loan - the money to pay the loan can come from anywhere, including the rental home.

 

[Maria83]

I just thought Id clarify that if you go down the deferred payment route (I dont actually know if its possible in this case) and have to take out a loan on her main home, its doesnt mean that that home has to be sold to pay off the loan - the money to pay the loan can come from anywhere, including the rental home.

OK thank you, that's really helpful!