Right to buy advice needed!!

RFM98

Hi,

I was thinking about buying my council flat. They have valued it at 92K and offered to sell to me for just under 39K. Is it correct that only certain lenders offer mortgages for right to buy properties? - not sure where to go..... oh, and am I correct in thinking that I wont need a deposit because of the diffference between purchase price and value????..... Thanks

poppy10_2

You'll normally still need a 5% deposit - mainly because you will not be able to sell at the full market price for a number of years without having to pay back the RTB discount.

It's surprising that you say you have been offered a £53k discount - the national maximum is £38,000, and many local authorities have lowered this. Are you sure your figures are correct?

RFM98

Hi Poppy10,

Thanks for your reply. Yes my figures are correct - because my tenancy agreement was in place before the changes in 2002 I am still entitled to the old discount. At present it is around 58% discount. This can rise to a maximum of 70% if/when my tenancy reaches 15years - as long as I dont sell within 3 years I dont have to repay any of the discount. I was just unsure as to the deposit situation.

Mrs_Bumble

Is the flat in a block?
If so what floor is yours on?
What construction is the flat?
Will there be a service charge at all?
How long will the lease be?

RFM98

Thanks for the replies!!

Koasdj - With regard benefits, I have never claimed any. I have always paid the full rent and council tax - we don't have water charges in Scotland.

Mrs Bumble - My flat is a block of four and I am top left. If I do buy then there is no set service charges - these only apply to multi storey flats where there are lifts/shared laundry etc.... I would be responsible for a share of payment if there was any "communal" work carried out - as the cost is split between each flat.

I am just unsure as to type of mortgage and which lenders offer under right to buy scheme as I will not fully own it for 3 years (having to pay back percentage of discount if I sell before) - I will have to keep digging around!!

Mrs_Bumble

If you purchase the flat under the right to buy then you will own it, however you will have repayment penalties if you sell in the first 3 years and because of this not all lenders will offer mortgages for the right to buy scheme.

Lenders like Nationwide, Halifax, C&G, Woolwich did offer mortgages for Right to Buy.

Conrad

Lenders tend to like set service charges as ageneral rule, and on 99.9% of flats set charges, plus provision for the odd ad hoc expense is normal.