Right to buy

Rob_the_student

Hey, I'm new to the forum so go easy on me.

I have a plan to buy my mums council house in the next two to three years, she has been a council tenant for more than 30 years so she is entitled to the full right to buy discount (60%). The house is in tax band A, so is worth less than £40k in the eyes of the council, precisely how much they value it as, I'm not sure. By mum has always said that she would give me ownership of the house if I ever decided to use her right to buy. She had a valuation done by the council a few years ago, and she found out that she could buy the house outright for £13k. The average market price for houses on my road is 115k

So anyway, this is my situation at the moment, I'm a 21 year old student living in manchester i save about £2000 each year. I'm only in university two days of the week and if i get a part-time job, I figure i could make 10k-15k within 2-3 years, then pay off the house without the need for a mortgage.

I'm sure I'm missing out some important details with this whole right to buy scheme, thats why I need this forums help deciding whether this plan is a good idea.

:money:

McKneff

YOU have no right to buy your parents house, YOU are not the tenant, YOU are not entitled to any discount

Your mother would have to take the mortgage out. And forget the £13K, thats in your dreams nowadays.

If your mother buys it and wills it to you then that is a different matter. As far as I am aware she cannot just 'turn the house over' to you.
Im sure there will be more comments coming along.

BitterAndTwisted

The only person who could buy the property is the person on the rental agreement. Are you registered as a tenant in the property?

Have you thought through what the impact might be for your mother by giving up a secure tenancy? Are you absolutely certain that the discount available to your mother is 60%? I thought there was an absolute cap of about £38k these days. Do you think that would be enough to compensate for all of the costs of repairs and maintenance owning a property would entail for the foreseeable future and what impact this might have on someone of your mother's age? Is it really possible for your mother to "give you ownership" of the property without falling foul of the rules regarding disposal of assets should you mother need long-term care at some point in the future?

carefullycautious

There is also a cap on how much discount your mother will get. At present our local authority allows 26,000 below market value.

So it does not matter how long your mum has been a council tenant she is only allowed a certain discount.

John Prescott stopped the percentage on years rented some time ago

Rob_the_student

McKneff wrote: »

YOU have no right to buy your parents house, YOU are not the tenant, YOU are not entitled to any discount

Your mother would have to take the mortgage out. And forget the £13K, thats in your dreams nowadays.

Like i said, she applied for right to buy two years ago and thats the quote she got. I have lived in the house all my life, but i know i have no right to buy. I'm talking about giving the money to my mum to buy the house.

Rob_the_student

carefullycautious wrote: »

There is also a cap on how much discount your mother will get. At present our local authority allows 26,000 below market value.

So it does not matter how long your mum has been a council tenant she is only allowed a certain discount.

This makes a bit more sense, i was playing it by ear by what the direct.gov website says

McKneff

Rob_the_student wrote: »

Like i said, she applied for right to buy two years ago and thats the quote she got. I have lived in the house all my life, but i know i have no right to buy. I'm talking about giving the money to my mum to buy the house.

But youre not giving the money to your mum to buy the house, you are giving it to her to buy it so she will give it to you.
So just out of curiosity, why didnt she buy it when she applied last time.

Would she be able to get a mortgage, you havent said what age she is either, there are implications long term for her regarding this sort of thing,

poppysarah

Who will repair the house? Will she pay you rent? How do you see the deal working out for your mum if you fail to repay the mortgage and it gets repossessed.

What if you need to buy a house for yourself in the meantime?

Rob_the_student

McKneff wrote: »

But youre not giving the money to your mum to buy the house, you are giving it to her to buy it so she will give it to you.
So just out of curiosity, why didnt she buy it when she applied last time.

Would she be able to get a mortgage, you havent said what age she is either, there are implications long term for her regarding this sort of thing,

Me, my girlfriend and my mum had a plan that we would buy the house, then after both me and my girlfriend finish university we would live with our parents for 3 years while we save, then all three of us would get a mortgage on a second house while renting the one me and mum live in right now.

She applied last time to check the price, shes done it once every 7 years or so.

If the price she recieved last time is correct, then we would beable to buy outright without a mortgage, unless thats one of the requirements of right to buy.

Oh and shes 70 years old, thats one of the reasons i wouldnt want to leave her to live on her own.

McKneff

Well now, at 70 years old it wouldnt be feasible. What happens in 5 years time, if she has to go into a home, who do you think will have to pay for that. Siging the house over to you wont help because she will still be treat as if she still owns it. Its called deprivation of assets.

The house would have to be sold to pay for her care,

Does she claim any benefits, they would be affected because she would be seen to have capital. (ie the house value)

I really think youre living in a dream world, whose to say you and your GF will still be together, whose to say your mother will still be around. Oh the naivety of youth, (meant in the nicest possible way of course)

Are you sure you have dates right, your mum was 49 years old when you were born.

poppysarah

Rob_the_student wrote: »

Oh and shes 70 years old, thats one of the reasons i wouldnt want to leave her to live on her own.

You should speak to a solicitor about the implications of her owning assets if she needs care.