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    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:06 AM
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    charlesworth82
    Council House Purchase - help
    • #1
    • 15th Jun 17, 11:06 AM
    Council House Purchase - help 15th Jun 17 at 11:06 AM
    Hi, I'm hoping someone can advise on if this is possible:

    My mum has lived in her council house her entire life. she's now decided she would like to purchase it.

    She only works part time so she's doubtful with her age and income that she won't be able to get a mortgage. She has been told she can put someone else on with her.

    She has asked myself. My issue is I already own a house. Would this be classed as a second house and all the fees and costs associated with that?
    ‘It ain’t over 'til it's over’
Page 1
    • mrschaucer
    • By mrschaucer 15th Jun 17, 11:09 AM
    • 432 Posts
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    mrschaucer
    • #2
    • 15th Jun 17, 11:09 AM
    • #2
    • 15th Jun 17, 11:09 AM
    You already own one house. This would be your second. Extra SDLT would apply, plus CGT eventually. Why does she want to buy it?
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:12 AM
    • 301 Posts
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    charlesworth82
    • #3
    • 15th Jun 17, 11:12 AM
    • #3
    • 15th Jun 17, 11:12 AM
    she wants to buy it as the mortgage payments would actually be less than what she pays now (plus it would be hers)
    ‘It ain’t over 'til it's over’
    • fairy lights
    • By fairy lights 15th Jun 17, 11:21 AM
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    fairy lights
    • #4
    • 15th Jun 17, 11:21 AM
    • #4
    • 15th Jun 17, 11:21 AM
    she wants to buy it as the mortgage payments would actually be less than what she pays now (plus it would be hers)
    Originally posted by charlesworth82
    Ok, but - how is she going to be able to afford repairs maintenance on the house? If she only works part time and has a low income what would she do if some thing major needs doing?
    • Barejester
    • By Barejester 15th Jun 17, 11:24 AM
    • 13 Posts
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    Barejester
    • #5
    • 15th Jun 17, 11:24 AM
    • #5
    • 15th Jun 17, 11:24 AM
    Hi Charlesworth82, as to your specific question yes you'll attract the tax and fees associated with a second property if your interest in the property is greater than £40,000


    However, you should consider a serious conversation with your Mum about this - my Mum was in a situation which sounds fairly similar to yours recently in that she was keen to purchase her council house for the same reason you've listed above, because she wanted to own and the discount would be very attractive. I actually came here to ask for advice in talking her OUT of that decision.


    You've already acknowledged that your Mum is on a low income and that wouldn't be able to get a mortgage by herself - at present, the council are responsible for repairs that need doing to the house and she has lifetime security, where as if your Mum was to be an owner, could she afford the costs that come with ownership? A new boiler as an example can be a few thousand pounds easily.
    • Mojisola
    • By Mojisola 15th Jun 17, 11:24 AM
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    Mojisola
    • #6
    • 15th Jun 17, 11:24 AM
    • #6
    • 15th Jun 17, 11:24 AM
    she wants to buy it as the mortgage payments would actually be less than what she pays now (plus it would be hers)
    Originally posted by charlesworth82
    Does she get any Housing Benefit to help with the rent?
    • ska lover
    • By ska lover 15th Jun 17, 11:27 AM
    • 2,401 Posts
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    ska lover
    • #7
    • 15th Jun 17, 11:27 AM
    • #7
    • 15th Jun 17, 11:27 AM
    OP in my area, you cannot just put someone else on with you, they have to live there, and proof of this must be provided going back 12 months. It may not be like that in your area though
    Blah blah blah.
    • Cakeguts
    • By Cakeguts 15th Jun 17, 11:34 AM
    • 2,462 Posts
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    Cakeguts
    • #8
    • 15th Jun 17, 11:34 AM
    • #8
    • 15th Jun 17, 11:34 AM
    In many councils you can only get the right to buy if you are a tenant. So you don't have the right to buy this house which means that you can't get a mortgage to buy it. The only person who can buy it is your mother and she can't afford it. There is actually no benefit to her in owning it and a lot of risks.
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:38 AM
    • 301 Posts
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    charlesworth82
    • #9
    • 15th Jun 17, 11:38 AM
    • #9
    • 15th Jun 17, 11:38 AM
    In many councils you can only get the right to buy if you are a tenant. So you don't have the right to buy this house which means that you can't get a mortgage to buy it. The only person who can buy it is your mother and she can't afford it. There is actually no benefit to her in owning it and a lot of risks.
    Originally posted by Cakeguts
    She's spoken to them and can put a non-tenant on.

    The main benefit for her is she would buy a house for around 40% of the value - and also pay less a month. The risks would be if things go wrong in the house but I would pay for that if need be.
    ‘It ain’t over 'til it's over’
    • Out, Vile Jelly
    • By Out, Vile Jelly 15th Jun 17, 11:43 AM
    • 3,385 Posts
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    Out, Vile Jelly
    The value of the house isn't relevant; what's important is that your mum has a secure tenancy and doesn't have to worry about maintenance costs. There is a lot to be said for that peace of mind when you're on a low income. You can't guarantee that the mortgage will always be lower than the current rent, especially given the financial uncertainty facing the country.
    They are an EYESORES!!!!
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:44 AM
    • 301 Posts
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    charlesworth82
    Does she get any Housing Benefit to help with the rent?
    Originally posted by Mojisola
    No - she covers it all herself.
    ‘It ain’t over 'til it's over’
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:46 AM
    • 301 Posts
    • 64 Thanks
    charlesworth82
    The value of the house isn't relevant; what's important is that your mum has a secure tenancy and doesn't have to worry about maintenance costs. There is a lot to be said for that peace of mind when you're on a low income. You can't guarantee that the mortgage will always be lower than the current rent, especially given the financial uncertainty facing the country.
    Originally posted by Out, Vile Jelly
    She doesn't have to worry about any of the costs as I can cover them all. Mortgage would only be about 7/8 years. you can sell after 5 (make a big profit) in worst case scenario
    ‘It ain’t over 'til it's over’
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:50 AM
    • 301 Posts
    • 64 Thanks
    charlesworth82
    Hi Charlesworth82, as to your specific question yes you'll attract the tax and fees associated with a second property if your interest in the property is greater than £40,000
    Originally posted by Barejester

    it will actually be less than 40k she would pay - any idea of the tax/fees etc. associated with less than>?
    ‘It ain’t over 'til it's over’
    • Mojisola
    • By Mojisola 15th Jun 17, 11:55 AM
    • 27,607 Posts
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    Mojisola
    No - she covers it all herself.
    Originally posted by charlesworth82
    On a part time wage? Must be quite a well-paid job.
    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:59 AM
    • 301 Posts
    • 64 Thanks
    charlesworth82
    On a part time wage? Must be quite a well-paid job.
    Originally posted by Mojisola

    I think council rent is only around 350
    ‘It ain’t over 'til it's over’
    • Red-Squirrel
    • By Red-Squirrel 15th Jun 17, 12:00 PM
    • 1,176 Posts
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    Red-Squirrel
    She doesn't have to worry about any of the costs as I can cover them all. Mortgage would only be about 7/8 years. you can sell after 5 (make a big profit) in worst case scenario
    Originally posted by charlesworth82
    What if you lose your job, or, God forbid become ill, disabled or even die? It does happen.

    You're thinking about money as the only kind if value, but a home you can stay in forever, guaranteed to be affordable, where you can claim housing benefit if you can't pay, where you don't have to worry about maintenance, and where you will be rehoused to something more suitable if you become frail or have special requirements in the future, is incredibly valuable and shouldn't be thrown away just in order to leave an inheritance.
    • fairy lights
    • By fairy lights 15th Jun 17, 12:02 PM
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    fairy lights
    Mortgage would only be about 7/8 years. you can sell after 5 (make a big profit) in worst case scenario
    Originally posted by charlesworth82
    Ahh. I see.
    • Red-Squirrel
    • By Red-Squirrel 15th Jun 17, 12:04 PM
    • 1,176 Posts
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    Red-Squirrel
    Ahh. I see.
    Originally posted by fairy lights
    Depressing, isn't it?
    • Barejester
    • By Barejester 15th Jun 17, 12:08 PM
    • 13 Posts
    • 11 Thanks
    Barejester
    it will actually be less than 40k she would pay - any idea of the tax/fees etc. associated with less than>?

    I'm not completely up on the details and someone much more knowledgeable than me would come along and explain I'm sure. If your share of the property is less than £40,000 you will not have to pay the additional Stamp Duty, however between you you'll still have legal/survey/mortgage fee's which you can get quotes for.


    I wanted to weigh in more on the consideration of looking at the whole picture and your Mum should consider what would be the best benefit for her in the long run - right now she has a home for life, if she pursues this she'll have an asset that she may or may not be able to afford to upkeep.


    She doesn't have to worry about any of the costs as I can cover them all. Mortgage would only be about 7/8 years. you can sell after 5 (make a big profit) in worst case scenario

    This however makes it seem like you're looking at this as a potential cash cow for your own gain and you're looking at a way to use your Mum's discount for profit/additional property, I apologise if that's a mischaracterisation.
    • BrassicWoman
    • By BrassicWoman 15th Jun 17, 12:09 PM
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    BrassicWoman
    Depressing, isn't it?
    Originally posted by Red-Squirrel
    and yet inevitable
    May GC £215/£50 (oops)
    April 2016 GC: £24.09/ £20
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