Living in council flat & owning house in uk

astonsmummy

MyUserNamesTaken wrote:

I would go further than that. HB is means tested, as you know. Once someone no longer qualifies for HB, they still pay only a subsidized rent. I think this subsidy should also be means tested. The more you earn, the less subsidy you get until you reach a point whereby the rent is at market level with similar privately rented properties in the same area. This would stop certain people who earn large amounts of money wasting it on holidays abroad twice a year, new cars and 42 inch LCD tvs because they get subsidized rent in a secure council property, so never have to worry about being turfed out. Believe me, this happens.

That doesnt sound like such a bad idea? When thinking abut it, as a lone parent working part time, altogether i get about £10k a year, i pay roughly £40pw of my £86pw rent, yet a couple who earn say £25k + a year pay around £45pw week more than me - i dont begrudge paying the rent as i'm grateful to be fortunate enough to have a council palce.

A_Nice_Englishman

wxmlad wrote:

sorry to hijack

quick question:

if u have lived in a coucil house for 30yrs and u are entilted to max discount being 60%, will u only get £16k off the house price in wales, seems a bit low? people in our street say they only paid £39-£60k for thier council houses 5 yrs bk now worth £150k

Yes, that's right according to Shelter Cymru
The people in your street seem to have benefited from inflation in house prices rather than discounts (though I don't know what discounts were available 5 years ago. The rules may have been different then).

davsidipp

shabani just read this post and i live in london and never got the chance to have cheap council rented accomadation think yourself lucky.also if you was to rent out the council flat and buy some where else that is called sub letting and is not allowed.

davsidipp

sorry read post wrong you would stay in your council flat and buy another property to rent out i would go to the council and find out first if you are allowed to do this .my post before was because in the borough i live in subletting is rife and i think people are lucky to have a chance to get a council place when i struggled and worked hard to buy one years ago.

ctabuk

A little known fact about the Right to Buy is the amount of Capital Receipts retained by the Selling RSL (Registered Social Landlord) Of the sale price all of the Capital raised by the sale goes directly into HM Government -20% of the sale price is then returned to the RSL from which they get 10% of that sum per fiscal year. So the loss in revenue is extremely substantial. This coming from a Broker involved in the market place? Yes, but one who has campaigned for the release of all capital receipts to be retained by the Selling RSL and from one who does not advertise other than by natural search.
With Social Homebuy, Open Market Homebuy and Newbuild Homebuy for Keyworkers and some tenants coming into force next month then it will be interesting to see how the government fares as a lender and it will be even more interesting to see if any receipts go where they are most needed into newbuild socialy rented properties.
I agree with those who stated that it would be wrong to continue to rent the property whilst buying another. But what really annoys me is the number of calls that we receive with questions like 'My auntie is 87 and would love to own her Council House, can we help her?'
Now THAT is abuse, all they want is her discount and property and probably put her in a home until she departs. Pity we cannot swear in the forums!!

MortgageMamma

ctabuk wrote:

A little known fact about the Right to Buy is the amount of Capital Receipts retained by the Selling RSL (Registered Social Landlord) Of the sale price all of the Capital raised by the sale goes directly into HM Government -20% of the sale price is then returned to the RSL from which they get 10% of that sum per fiscal year. So the loss in revenue is extremely substantial. This coming from a Broker involved in the market place? Yes, but one who has campaigned for the release of all capital receipts to be retained by the Selling RSL and from one who does not advertise other than by natural search.
With Social Homebuy, Open Market Homebuy and Newbuild Homebuy for Keyworkers and some tenants coming into force next month then it will be interesting to see how the government fares as a lender and it will be even more interesting to see if any receipts go where they are most needed into newbuild socialy rented properties.
I agree with those who stated that it would be wrong to continue to rent the property whilst buying another. But what really annoys me is the number of calls that we receive with questions like 'My auntie is 87 and would love to own her Council House, can we help her?'
Now THAT is abuse, all they want is her discount and property and probably put her in a home until she departs. Pity we cannot swear in the forums!!

Hi - sorry this has gone completely over my head - not being a specialist in that area of market nor dealing with it much at all - could you explain step by step what the process of the distribution is so I can try and understand it?

Thanks

MM

achtunglady

Just a quick note, some councils are conducting home checks. I had one of these where my estate manager came to see me at home and i had to provide id and proof of living there, (utility bill and latest bank statement) my entry on the elctoral register was checked too.The same for my hubby too. We don't claim any HB or any other means tested benefits so i asked her why this is and she replied that it was to stop people letting out their council property, whilst living in their own.
The capped rate of a maximum discount of £16k is only recent, thats why you hear of people living in their council properties for X amount of years who got a substantial discount, up to 55% in the old days.
We have been offered £34k to give up our tenancy(two bed flat), and buy in the private sector, the £34k will be given when completion takes place so in effect its a nice deposit and you only have to get a mortgage on the balance of the value of property.

ctabuk

OK - Assume a purchase price of £120,000 - From that only £24,000 (20%) goes into the Councils coffers £96,000 goes to Gordon Brown and Partners marked as RTB Housing Receipts -the money is used for traditional tax purposes. Of that £24,000 £2,400 is actually available to use in any one fiscal year. The rest is re allocated. Assuming a rent of say £120 per week - the annual rental stream would be £6,240 -so the sale will produce a net loss of £3,840.00 per annum. The whole of the money should be 'ring fenced' for Social Housing purposes, but in reality Councils have to apply to the Housing Corporation for allocations. Which is why some well off Councils have to provide funds for the less efficient ones. Anyone who thought that Mrs Thatcher came up with the concept of Right to Buy as a act of extreme generosity has not twigged that it was another tax. In fact, it was not until pressure was bought to bear on Sir George Young the then Housing Minister in 1992 (Boy I've been at this a long time) that ANY of the money went for Social Housing use. The money has gone, been used elsewhere, sorry chaps [:(] - And people wonder why we have a lack of new build projects.

MortgageMamma

Ah right I see! thanks for explaining that - I am only 30 so a lot of thatcherite stuff went over my head. I was too busy being a child!

It does seem spectaculary unfair that the council does not benefit from the majority of sale proceeds. It would be interesting to know how the money was/is reallocated and what its really spent on - is there any way of finding that out?

PoorDave

A_Nice_Englishman wrote:

Well the OP is thinking about buying a property to let out and that may well go to someone in genuine need too

But this "someone in need" will have to pay private rental level rent, rather than HA/council level rent, presumably