Buy council house

Bryando

Hi.

I have to live here for 5 years then could buy my flat. I don't work but do get DLA. The rent is £240.00 per month. £260.00 per month inc Council Tax.

Do you need to be working full time to buy a house? People tell me I be cheaper paying into a morgage.

I've no idea when it comes to this. Any advice? I'm in Scotland, incase its different.

thanks

Treadmill

Difficult to say as you don't say how much you need to borrow.

CIS

If you buy the house remember that you would no longer get HB .

princeofpounds

It is not a simple calculation unfortunately. And when people tell you 'it's cheaper paying a mortgage' they are only looking at the situation of the next monthly payment, not the whole-life cost of such a decision.

Interest rates are really low right now historically, almost unprecedentedly so. They could rise, which might make payments unaffordable in future. It might be a better idea, and a fairer comparison, to look for long-term fixed mortgages, as if you are on welfare and disabled I'm not sure what your flexibility to look for extra income is. That will appear more expensive on the initial payments but would be a safer option, and it also means that the market expects interest rates to rise from current levels at some point.

The next thing to be aware of is that you will need to compare the different future paths of the council rent, which will increase in an inflationary way somehow, and the cost of the mortgage, which will be based on a static nominal house price and could be inflated away over time. There is also the issue of a capital gain (or loss) on the value of the house itself, which perhaps if you intend to stay there for life is not such an issue.

I can't help you with the benefits part of the equation I'm afraid, and that's likely to be just as critical.

tek-monkey

CIS wrote: »

If you buy the house remember that you would no longer get HB .

Yup, they wont give HB to pay a mortgage.

worried_jim

Don't do it ! You have it soooo good (cheap) now don't risk it.

Jowo_2

Benefits are not classed as income. The typical route to home ownership is to work, save for the deposit and get a mortgage with the lenders who loan you the sum based on multiples of the applicant's salary.

http://www.moneymadeclear.fsa.gov.uk/products/mortgages/how/how_much_can_you_borrow.html

I am not aware of any scheme whereby the state actually facilitates home ownership for benefit claimants.

Oldernotwiser

CIS wrote: »

If you buy the house remember that you would no longer get HB .

And that you'll be responsible for all maintenance and insurance, which will have to be paid for out of benefits.

Running_Horse

Wow. Amazed to hear the social security safety net is being used to buy property. Perhaps I need to give up work.

Jowo_2

Running_Horse wrote: »

Wow. Amazed to hear the social security safety net is being used to buy property. Perhaps I need to give up work.

It's not, though there are numerous schemes to help those with a non-benefit related source of income to buy more affordable property.

There are just regular posts on this site from people innocently enquiring whether they can get a mortgage based on their benefits, oblivious to the fact it would be an enormously unpopular move to gift ownership of a private property through taxpayers money or that the safety net of the welfare state was never structured to personally enrich those receiving it.

Jewel_2

I'm just absolutely bewildered that anyone can buy a council house. I think it's awful.