PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Section 157 housing act help

Hellz85
Hellz85 Posts: 46 Forumite
First Post First Anniversary Combo Breaker
in House buying, renting & selling
Hi all

I have found a house which I love, however, this house falls under/has a clause (?) section 157 of the housing act which states that you have to live or work in the area (Devon) for 3 years prior to buying the house. Even though I have very strong ties to the area (born, grew up, relatives) I have lived and worked away for too long. I have checked this with the council too and the only way around it seems to be if you are contributing to the community ie police, nursing, social work. I don't do any of these.

There is no reason, however, why my parents can't buy the house and we transfer the house over to me in 3 years time. The council lady says this is fine and parents would be happy for this too. My question is, how much more will this cost us? They already own a home so I assume this would all need to happen before April to avoid a higher rate of stamp duty. How much are we likely to be charged to transfer back to me in the future? No mortgage required.

Thanks in advance for anyone who can help :beer:
«13

Comments

  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    Will your parents buy the house with their own money or will they borrow from you in order to do so?
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Costs would be

    * costs for parents of any mortgage they set up (or would they pay cash?)
    * legal fees, though if your parents have no mortgage you could DIY the transfer from them to you - again assuming you need no mortgage
    * SDLT (depending on value)
  • bigheadxx
    bigheadxx Posts: 3,047 Forumite
    If you have a local connection, you should be able to get permission from the council to buy it. I bought a house with this restriction and a letter to the council stating that we had parents living locally was enough.
  • booksurr
    booksurr Posts: 3,700 Forumite
    G_M wrote: »
    Costs would be

    * costs for parents of any mortgage they set up (or would they pay cash?)
    * legal fees, though if your parents have no mortgage you could DIY the transfer from them to you - again assuming you need no mortgage
    * SDLT (depending on value)
    given the property must be in the parental names you have forgotten to add Capital Gains Tax to that list (calculated at market value of course given connected person status)
  • sniggings
    sniggings Posts: 5,281 Forumite
    First Post First Anniversary Combo Breaker
    Hellz85 wrote: »
    Hi all

    I have found a house which I love, however, this house falls under/has a clause (?) section 157 of the housing act which states that you have to live or work in the area (Devon) for 3 years prior to buying the house. Even though I have very strong ties to the area (born, grew up, relatives) I have lived and worked away for too long. I have checked this with the council too and the only way around it seems to be if you are contributing to the community ie police, nursing, social work. I don't do any of these.

    There is no reason, however, why my parents can't buy the house and we transfer the house over to me in 3 years time. The council lady says this is fine and parents would be happy for this too. My question is, how much more will this cost us? They already own a home so I assume this would all need to happen before April to avoid a higher rate of stamp duty. How much are we likely to be charged to transfer back to me in the future? No mortgage required.

    Thanks in advance for anyone who can help :beer:

    wow! so the council woman has agreed to you circumventing the rules?

    I would get this in writing as surely if the rules are so tight that someone born in the area etc can not get permission to buy, then why would they A, give you the go ahead and B, let someone that already has a house buy another in the area, that must be going against the very spirit of the clause.
  • Davesnave
    Davesnave Posts: 34,741 Forumite
    Name Dropper First Anniversary Photogenic First Post
    sniggings wrote: »
    wow! so the council woman has agreed to you circumventing the rules?.

    You can take it from me that there are rules regarding restricted housing which are not enforced in some parts of rural Devon, but in any event, it seems like the OP is willing to comply in due course.
  • Hellz85
    Hellz85 Posts: 46 Forumite
    First Post First Anniversary Combo Breaker
    No mortgage needed. The money is half mine and half gifted from them.
  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    You are planning to live in the property once it has been bought?

    If so, I would write to the council and make it clear that I was born and grew up in the area, my parents still lived there, and wanted to make me a gift of money to enable me ( with an addition from my own financial resources) to buy a house close to where they live.

    This might be enough to get you permission to buy in your own name?

    Failing that, I wonder could this be done through a Trust arrangement whereby your parents are the legal owners but you are the beneficial owner, with legal ownership passing to you after three years?

    A solicitor would advise.
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Hellz85 wrote: »
    No mortgage needed. The money is half mine and half gifted from them.
    If your parents will purchase the property without a mortage, and you in turn will not require mortgage, then transferring the property from parents to you is straight forward:

    1) transfer
    * TR1
    * ID1
    * AP1

    2) SDLT

    3) CGT

    You should be able to do all that yourself.
  • Hellz85
    Hellz85 Posts: 46 Forumite
    First Post First Anniversary Combo Breaker
    I think I'm going to attempt to apply myself otherwise it's going to cost a lot more in the long run. I just need to get the wording right as to why we should be able to own the property. It's a hurdle we could do without :(
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.9K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards