Our right-to-buy

ZootHornRollo

Hi,

I have been with my partner for 6 years. She has been a council tenant for nearly 20 years, in our current home for over 10 years.

We were thinking about buying the house under right-to-buy but have a few queries.

Firstly, i heard if we were to enquire directly with the council about buying the house all improvement works get stopped. Is that right? The house desperately needs a new kitchen which we have been told for the last three will be coming soon. This is one of the main reasons we'd like to buy the house. The kitchen is becoming a health hazard with rotten work tops (due to repair works completed by council workers not being sealed correctly), cabinets are starting to fall apart etc etc. We will replace the kitchen ourselves but not if the house belongs to the council.

Are there any restrictions with a joint application to buy? She is the only person named on the missives but i have been down as a joint tenant on the council tax for quite some time.

Would we qualify for maximum discount? I believe this would be 60% as she was a tenant before 2002.

If buying at the discounted price, would a mortgage for the discounted purchase price still be classed as 100% if there was no deposit? do 100% mortgages still exist?

My partner was previously bankrupt which 'lapsed' in december last year. I realise this will have an effect on any mortgage but how much difference is it likely to make?

Are there any fee's applicable to the right-to-buy? do all the usual house buying expenses stand (valuations, solicitors, etc etc)?

We intend to seek independant financial advice but i would like to be forearmed with some knowledge before doing so. That was i can have some questions ready and not get any big surprises.

Any help would be appreciated.

BitterAndTwisted

It's my understanding that the percentage discount based on the length of the tenancy was abolished some years ago and that the maximum is now about £40k. It's true that people have seen repairs and mainntenance work stopped once you put in your application. Don't forget that the Local Authority are obliged to inform you of any major works planned for the next five years so you can budget accordingly.

To be honest, with council rents so low compared to the commercial market I don't see a problem with paying to put your own kitchen units in. I have

bluejake

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001398

The maximum discount ranges from £16,000 to £38,000 for both flats and houses depending on where you live. To find out about the discount available contact your landlord.

Welshwoofs

I would have thought that if your other half came out of bankruptcy less than a year ago, she'd find it very difficult to get a mortgage in the current climate...at least a mortgage at a decent rate.

BitterAndTwisted

In the current economic climate it might make more sense in the short-term to continue renting so if either of you become unemployed you could still be eligible for LHA. Once you have a mortgage the only help available would be towards the interest part of it. Please do not underestimate the cost of repairs and maintenance incurred when owning a home: it's not just rent versus mortgage payments.

ZootHornRollo

we were thinking about purchasing in the next year or so. would give us a chance to get the money side sorted out.

But we need to know what sort of figures we would be looking at. We are in Scotland - don't know if that makes any difference with the right to buy - according to the leaflet on the east lothian council website, a discount of up to 60% is available.

http://www.eastlothian.gov.uk/downloads/CS079_Right_to_Buy_Art01.pdf

i don't want to go prying and then the council then take us of the new kitchens list.

i am pretty sure my job is secure in the mid term - but i guess you can never be sure! my partners is a bit in the air just now which is why we were thinking a year or so down the line. she works for somerfield and her store is subject to disposal to conform with the competition rules.

thanks for your input.

littlemissfavored

If buying at the discounted price, would a mortgage for the discounted purchase price still be classed as 100% if there was no deposit? do 100% mortgages still exist?

I bought my home on a RTB this year.
The Mortgage is based on the value of the property.

e.g The council is selling a property to you @ £100k. They give you a 20% discount- hence you pay £80k.
When you approach the Mortgage company, they will value the property to determine if the property is worth the £100k.

If they are willing to give you the Mortgage, a 100% Mortgage will be on the Value of the property which is £100k (100% mortgages are rare or virtually non-existent due to the economy).

If you only borrow what you need -£80,000, then you have a 80%
Loan to value (LTV) mortgage (in which you have a lower rate than a 100% LTV) and an immediate equity of £20k (possibly more equity as the council tends to value a bit lower than the market price)

In my case, buying my flat from the council was the only way I could get on the property ladder -becos I had no deposit and as there were no 100% mortgages (not that I would have wanted it anyway- too risky for me!).
The £16k discount I got served as my deposit. I was able to get a 85% LTV without a deposit also the council valued at £110k and the market rates for my flat is abt £130k

Have a good think about it, do take into consideration repairs, maintenance, water rates, if its a flat service charge etc. becos once you buy you have to pay for these yourself.
You will be subject to valuation fees(for me it was £315) as well Solictors fees etc (abt £1500 for me), Stamp duty (depending on Price) and possibly a Mortgage arrangement fee.
All the best!

ILW

littlemissfavored wrote: »

In my case, buying my flat from the council was the only way I could get on the property ladder -becos I had no deposit and as there were no 100% mortgages (not that I would have wanted it anyway- too risky for me!).
!

Didn't think anyone referred to the Property Ladder any more.

Hair_Bear

That's right. It was renamed the Property Snake a few years back.

ZootHornRollo

littlemissfavored wrote: »

If buying at the discounted price, would a mortgage for the discounted purchase price still be classed as 100% if there was no deposit? do 100% mortgages still exist?

I bought my home on a RTB this year.
The Mortgage is based on the value of the property.

e.g The council is selling a property to you @ £100k. They give you a 20% discount- hence you pay £80k.
When you approach the Mortgage company, they will value the property to determine if the property is worth the £100k.

If they are willing to give you the Mortgage, a 100% Mortgage will be on the Value of the property which is £100k (100% mortgages are rare or virtually non-existent due to the economy).

If you only borrow what you need -£80,000, then you have a 80%
Loan to value (LTV) mortgage (in which you have a lower rate than a 100% LTV) and an immediate equity of £20k (possibly more equity as the council tends to value a bit lower than the market price)

In my case, buying my flat from the council was the only way I could get on the property ladder -becos I had no deposit and as there were no 100% mortgages (not that I would have wanted it anyway- too risky for me!).
The £16k discount I got served as my deposit. I was able to get a 85% LTV without a deposit also the council valued at £110k and the market rates for my flat is abt £130k

Have a good think about it, do take into consideration repairs, maintenance, water rates, if its a flat service charge etc. becos once you buy you have to pay for these yourself.
You will be subject to valuation fees(for me it was £315) as well Solictors fees etc (abt £1500 for me), Stamp duty (depending on Price) and possibly a Mortgage arrangement fee.
All the best!

Thank you.

Very helpful