Right to Buy Question on Parents Council property.

46
Found 23rd Feb 2016
Hi All -

I would like a little advice please as to the following scenario / circumstance -

My partners father has had his council house for 43 years - he is now elderly (72 years and he remains in good health), during most of these 43 years as a tenant he was in employment and paid full rent - when he stopped working he moved onto receiving housing benefit and essentially the rent is now paid for him.

Over dinner last week he asked us why we didn't consider buying the house as he would be entitled to a very large reduction in the value price - his rational was that he could have bought the house 3 times over in all the years he paid rent !!

At first we didn't think much of this, but after making initial basic enquires the property price of the house is estimated at around £70,000 - he would qualify for a 70% discount - meaning potentially the house could be purchased for just £21,000.

Do any members know if tenants are able to purchase their homes with the support of family (ie in this instance the tenants daughter and me, her partner). ??

My partner is the only child to the tenant (her dad), therefore we don't have to worry about other family members wanting to buy it and we have the full backing of him to do so - I have mentioned it to people at work and naturally the overwhelming response has been "do it as quick as possible" due to large discount available. Our thought process would be not to buy this with a view to sell on for profit, it would be for in later years when the inevitable occurs (partners father passes), we would move into the family home where my partner grew up.

Please can i have peoples thoughts - i appreciate these questions do often stir peoples opinions and emotions.
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I did exactly the same thing 18 years ago with my childhood family home. One of the best things I did.
Look in to it quickly. Right to buy is finishing soon. Well in scotland anyway. If its possible and you can get that sort of discount its a no brainer no matter what you intend to do with it
Look in to it quickly. Right to buy is finishing soon. Well in scotland anyway. If its possible and you can get that sort of discount its a no brainer no matter what you intend to do with it
I have read only the tenant has the actual right to buy - so not sure how it all works in terms of technically we would be buying it but in his name. Would he have to sign the house over to us - and can he do so straight away or does there have to be a certain amount of time before the house would be in our name?
We have no silly plans of buying it and turfing him out so it wouldnt matter but we would prefer the house to be in our name at some point if we were the ones that had financed its purchase.
Think he would have to have some share in the house seen as it will be under his name already. Could just be his name on the paper work. Make sure you look into it properly as if you end up in trouble for it they'll take the house straight away
yes the tennat will have to buy....not a problem f you have the 21k cash to buy....(put it in a joint name, him and your partner.

also a bank will happily issue a joint mortgage to him and your partner if this is what is required.

been there....done that
Not any help, but where do you live to be able to buy a house for £70k? I need to get moving there lol. Im in a 2 bed council house and even with discount wouldn't get a mortgage as prices are silly, looked online and similar houses in my street have gone for nearly 200k
You would have to make a joint purchase. For mortgage purposes they would need to be at least tenants in common. As far as the council is concerned you need to not sell the property within a 'number' of years with out paying back some of the discount applied, its on a sliding scale.

You do need to get professional advice as there would be other concerns such as death and subsequent sale (discount repayment etc), dad moving into care and the councils right to sell assets to pay for care etc etc.

Good luck as its a great start to the property ladder.
Im not sure you can make a joint purchase. As far as i know only the tennant has the right to buy the house and it cant be sold on for a certain amount of time (5 yrs i think?)
nick1981

I have read only the tenant has the actual right to buy - so not sure how … I have read only the tenant has the actual right to buy - so not sure how it all works in terms of technically we would be buying it but in his name. Would he have to sign the house over to us - and can he do so straight away or does there have to be a certain amount of time before the house would be in our name?We have no silly plans of buying it and turfing him out so it wouldnt matter but we would prefer the house to be in our name at some point if we were the ones that had financed its purchase.


The house was in mine and my mums names. Tenant has to be on the deeds, my mother never contributed towards the purchase. You can transfer the deeds after 5 years. I just wrote into the deeds that my mum could out live her days there rent free, just incase something happened to me.
Thankfully there are many restrictions in place to stop family members buying cheap and selling high.

One is if they pass away within a certain time money has to be repaid.

I believe you also have to show that the person buying [i.e. the person who will benefit, not the homeowner] has lived there for a certain number of years.
Thanks for the info guys - as i said im not too worried about the selling of the property side as we have not intentions in buying it to sell it on.
Our intention would be for him to live in it as he does now. However when he did pass away we would move into it, sell our own current property (which we do have a mortgage on) - and with the equity we have in our own/current property by buying the council house we would effectively be mortgage free due to the cost it would have been bought at. I know it sounds very clinical but the discount on offer is a once in a life time discount.
I should also have mentioned earlier we are not latching onto any kind of scam/freebie - my partner is 37 years old and for approx 10 years she herself contributed to the rent costs at this council property before we bought our own house together a few years ago.

Would a financial adviser be the person to offer sound advice / or would it be a solicitor - im thinking a solicitors advice would be costly?
As far as I understand only the tenant has the right to buy, not family members) . Will the tenant be able to get a mortgage in his own right? You may be able to,buy it for him by giving him the cash but if it needs to be sold for care purposes in later life you may lose out. In addition if you buy he will be responsible for all repairs/upkeep whereas at the moment it's all paid for.


Edited by: "LJM" 23rd Feb 2016
LJM

As far as I understand only the tenant has the right to buy, not family … As far as I understand only the tenant has the right to buy, not family members) . Will the tenant be able to get a mortgage in his own right? You may be able to,buy it for him by giving him the cash but if it needs to be sold for care purposes in later life you may lose out. In addition if you buy he will be responsible for all repairs/upkeep whereas at the moment it's all paid for.



I'm not sure he would get a mortgage as he's 72 years old and his income now is not very high.

We were hoping to look at the option of getting a second mortgage to purchase the property - if this would be problematic my dad has said he would be willing to assist us in purchasing the property.
I believe that the tenant can buy, or the tenant with up to 3 family members can buy together but they have to have lived in the property for at least 12 months.

I also believe that the council property has to be the only home, so as you have another property I think this could be an issue
nick1981

I'm not sure he would get a mortgage as he's 72 years old and his income … I'm not sure he would get a mortgage as he's 72 years old and his income now is not very high.We were hoping to look at the option of getting a second mortgage to purchase the property - if this would be problematic my dad has said he would be willing to assist us in purchasing the property.


I think only he, in his own right can buy. If he can't get a mortgage then maybe you could gift him the casj but as to you getting a mortgage to buy it - I donot think this is possible. Maybe someone who knows more about this may be able to advise. What would happen if you actually could get a mortgage to buy it then for some reason you could no longer pay it? He would lose his house.


Edited by: "LJM" 23rd Feb 2016
As I said earlier there are a lot of considerations to be taken into account. First speak to a mortgage adviser and then a solicitor. Take time to think of all the possibilities and connotations. But as you stated it is a discount of a life time. I do not see a problem personally, your dad has paid rent for years, why shouldn't he be able to pass on the discount?
To buy it I believe you have to be on the tenancy agreement
Lad who works for me was put on his parents tenancy incase he decides to buy in the future
This was about 3 years ago
Each area will be different no doubt
Edited by: "Bradleigh" 23rd Feb 2016
You could possibly remortgage your current house releasing some equity and hopefully raising enough cash to give your father in law.

I doubt your father in law would get a mortgage at that age.

Just another thing thats wrong with our country!!
Housing shortages all over & yet the council houses are still being sold off!!
No council tenant should have the right to buy, no matter how long they have lived there! If you can afford to buy a house, you shouldn't be in housing that is meant for people who cant afford to buy or rent privately!
Makes me sick when i go round some of the local estates to me & see Range Rovers & Jags parked outside council properties, why should they get cheap rent when they can afford £50000+ cars.
if your getting it at 21k take a personal loan not a mortgage pay it over 5 years and gift him the cash. have a lawyer draft terms that you have loaned the money and after 5 years he will give a portion of the house as payment this way ur paying the money but it's in his name.. eventually you would own the house though..
justanothercid

if your getting it at 21k take a personal loan not a mortgage pay it over … if your getting it at 21k take a personal loan not a mortgage pay it over 5 years and gift him the cash. have a lawyer draft terms that you have loaned the money and after 5 years he will give a portion of the house as payment this way ur paying the money but it's in his name.. eventually you would own the house though..



Hadnt thought of this option thanks.
Think i will get some legal advice before going through any formal channels.
Thanks to all there has been some valuable info.
amis1975

Just another thing thats wrong with our country!!Housing shortages all … Just another thing thats wrong with our country!!Housing shortages all over & yet the council houses are still being sold off!!No council tenant should have the right to buy, no matter how long they have lived there! If you can afford to buy a house, you shouldn't be in housing that is meant for people who cant afford to buy or rent privately!Makes me sick when i go round some of the local estates to me & see Range Rovers & Jags parked outside council properties, why should they get cheap rent when they can afford £50000+ cars.



Whilst I agree to a degree, the idea of right to buy was they were supposed to build new social houses, Sadly that hasn't happened.

Another thing, Social housing gives people some security with fair rents etc.. Gives you some time to establish yourself, Remember not everyone who lives in Council houses are on benefits.

The right to buy scheme as been heavily abused by people buying to let.

Don't hate the player though, hate the game.
You do not own the property he does. if he goes into care and the council want money to fund this they can sell this.

best to look into the legal aspects first, but apart from that is looks like a no brainer, go for it.
I really hope you can't do it op and someone stops it , there is a shortage of affordable homes and let's face it you aren't doing it for your father as he recieves housing benefit and so is secure, you are doing it for your own gain.

unbelievable.
go for it OP!! don't listen to the naysayers. they're just jealous. you have to look after your own interests and so long as you not breaking the law, I don't see a problem.

personally I don't agree to the whole RTB thing but hey, if its allowed, why not.
We looked into this a few months back as my partner wanted to buy his mums house.
The only person that can buy the house would be the tenant or any family member that has lived there within the past 12 months.
There's no way she would be able to get a morgage given her age and income (she only works part time and earns next to nothing) so our only option is to gift her the cash and she pays for the house in full.
Aiden1512

We looked into this a few months back as my partner wanted to buy his … We looked into this a few months back as my partner wanted to buy his mums house. The only person that can buy the house would be the tenant or any family member that has lived there within the past 12 months. There's no way she would be able to get a morgage given her age and income (she only works part time and earns next to nothing) so our only option is to gift her the cash and she pays for the house in full.



and why not. good on you Aiden. hope it works out for you.

I think this is similar to our circumstances - although if im honest i dont have £21k in the bank to buy the property outright, therefore financially i would need to raise the amount via releasing equity in the property we live in. Ultimatly it would mean buying a 70k property for just 21k and despite some people on here stating how its morally wrong, im pretty sure most people (whether they care would admit it or not) would think this is a no brainer.


Aiden1512

We looked into this a few months back as my partner wanted to buy his … We looked into this a few months back as my partner wanted to buy his mums house. The only person that can buy the house would be the tenant or any family member that has lived there within the past 12 months. There's no way she would be able to get a morgage given her age and income (she only works part time and earns next to nothing) so our only option is to gift her the cash and she pays for the house in full.



Edited by: "nick1981" 24th Feb 2016
EN1GMA

and why not. good on you Aiden. hope it works out for you.



Thanks, Enigma.

Hi there Justanothercid - just read your comment. What would the benefits be please for taking out a bank loan as apposed to taking out a second mortgage? I havent consider this as an option. From a financial point of view my personal mortgage is with Nationwide therefore i was considering approaching them about what options were available.

I would assume a bank loan would have a higher rate than a mortgage?

justanothercid

if your getting it at 21k take a personal loan not a mortgage pay it over … if your getting it at 21k take a personal loan not a mortgage pay it over 5 years and gift him the cash. have a lawyer draft terms that you have loaned the money and after 5 years he will give a portion of the house as payment this way ur paying the money but it's in his name.. eventually you would own the house though..



Edited by: "nick1981" 24th Feb 2016
Somebody needs to be a quailifying occupier i. E. Living in the property for 12 months and over. The council may ask your father or that person to evidence and demonstrate that they have been living there which is easier said than done.

Sucessions rights to the tenancy would cancel the rtb disxount as one tenancy is endng and a new one starting.

My advice is to get the 21k, give it to him and get him to buy it.

I dont believe in rtb hence this "housing crisis".

Good luck
Bump, how did you get on with this ?
I was looking into this for my dad and it is only your dad that can buy the house and it has to be in his name only unless you have lived there for the last 12 months before he buys the house. At least that was housing association but I don't think council houses will be any different.

Your dad has to get the mortgage himself.
We are talking about doing this gifting 31,000 cash to my grandad for him to buy his house out right. I'm unsure of if he passes and he leaves us the house in the will will we have to pay the discount if he passes in first 5 year
first point.... you give him the cash to buy it and it's classed as his income so there is tax on it after first £6,000.
second.... you already own a property, greedy or what ?
third.... if he becomes ill property goes for support of his care.
fourth... your wife cannot be on the purchase, she doesn't live there.
fifth if he dies within five years you cannot benefit.
sixth when he dies it's part of his estate.
seventh... once bought he will lose housing benefit and maintenance of property.

as for 'everyone does it'... myself and my ex didn't and there was a lot more money potentially profit/ involved on her father's four bedroomed semi.
bluetba

I really hope you can't do it op and someone stops it , there is a … I really hope you can't do it op and someone stops it , there is a shortage of affordable homes and let's face it you aren't doing it for your father as he recieves housing benefit and so is secure, you are doing it for your own gain. unbelievable.


spot on, Council housing are for those in need of a home. Scotland and Wales have stopped the sale of those homes.
jonnithomas

first point.... you give him the cash to buy it and it's classed as his … first point.... you give him the cash to buy it and it's classed as his income so there is tax on it after first £6,000.second.... you already own a property, greedy or what ?third.... if he becomes ill property goes for support of his care.fourth... your wife cannot be on the purchase, she doesn't live there.fifth if he dies within five years you cannot benefit.sixth when he dies it's part of his estate.seventh... once bought he will lose housing benefit and maintenance of property.as for 'everyone does it'... myself and my ex didn't and there was a lot more money potentially profit/ involved on her father's four bedroomed semi.


Also the housing benefit fraud section of the Council will want to know how he can now buy the house when he's been claiming housing benefit. And i'm sure that if he passes/leaves within 5yrs they the council can buy back the house for the same price they sold it for.
Wow. The amount of jealous people on this thread is unbelievable! I say buy your father in laws house. Ignore all these haters...obviously jealous and their noses are right out of joint. Great investment for your family. I say go for it!
Niks67

Wow. The amount of jealous people on this thread is unbelievable! I say … Wow. The amount of jealous people on this thread is unbelievable! I say buy your father in laws house. Ignore all these haters...obviously jealous and their noses are right out of joint. Great investment for your family. I say go for it!


As the op is wanting to buy someone else's council house so they can ultimately benefit it is fraud. It is not jealousy but rather the fact that everyone loses out in the long run due to these type of people defrauding the council
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