Renting out my ex council house

sassyjox

Cissi wrote: »

Unfortunately it sounds to me like you've been badly advised by family and friends. The "right to buy" scheme is not designed to help you make a quick profit and enable you to buy a nicer house elsewhere than you'd otherwise afford. It's intended to give you security and reward you for staying put.

The recent market boom meant that the scheme accidentally worked out highly profitably for some people - all funded by the taxpayer. Those days are gone, and I highly doubt it's now worth buying into it unless you're actually planning to live there for the full 5 years. I think you're finding this out the hard way.

You're right! We were advised by people who had bought their council homes at the "right" time. Whereas we know now that it was maybe the wrong thing for us to do. I also know the right to buy scheme isn't meant to be used in this way but sometime people have little option. We were stuck in an area renting and very unlikely to get out of it unless we found a huge deposit to buy somewhere. We felt at the time that this was our way out of it all!

sassyjox

robin_banks wrote: »

If the area is awful why did you buy the house ?.

We would have still been in the area if we had continued to rent it from the council. Buying is better than renting from the council isn't it? We couldn't afford to find a £30,000 deposit for a house in a nicer area, what choice did we have?

sassyjox

Alias_Omega wrote: »

Hi,

We purchased a council house in 2008 and in 2009 i found out that i was to be moved abroad with work, so we had to rent the house out.

You need to check your deeds, for what limitations you have. Ours was limited to basically selling the house as freehold, or selling as leasehold.

Nothing else was added into the deeds, and we checked with our solicitor to confirm this. We did not bother with the council, as it was our house now.

We applied for a consent to let from the mortgage company. It was granted, free of charge, though earlier this year i received a letter saying they would charge people for this, but funny enough were free if we wish to apply again, and wont achieve an higher interest rate.

Once you have the consent to let, get yourself a gas safety check, some landlord insurance and away you go...


We let our house through an agent, who found the tenant the same day the board went up. Our income from this goes something like -

Rental Income - £400

Outgoings -

Interest on mortgage - £200 a month
Agent fee - £50 per month
Landlord insurance - £10 a month (£120 a year)
Gas Safety Check - £4 a month (£45 a year)
Any repairs - ???
Accountant - £10 a month (£120 a year)

So you can see we clear about £140-£150 a month profit from the house, but this is taxable and you will need to provide a tax return. We therefore have employed an accounant who will sort this, and again is deductable from the income.

Note - You can only claim for the interest part of the mortgage, not the whole lot.

Happy renting..

Alias

Very helpful advice, thank you!

We have someone who is interested in renting out the property. I have got a lot of research to do before I take this step.

Do you find it stressful? What with repairs, etc?

Thanks again for your advice.

Mum_of_3_3

If the area is as bad, the house unsuitable and it's all making you as unhappy as you say then why don't you just sell the house, pay back the discount and move on?

Something else to think about before renting - if the area is a hole and getting worse then what kind of tenants do you think you'll attract?

M_o_3

PS just noticed you've since added you have a tennant. Will they be claiming LHA? If so then be aware some BTL mortgages will not allow you to let to LHA tennants.

robin_banks

sassyjox wrote: »

We would have still been in the area if we had continued to rent it from the council. Buying is better than renting from the council isn't it? We couldn't afford to find a £30,000 deposit for a house in a nicer area, what choice did we have?

Not really, you bought a house you may have trouble selling or renting out because it's as you say awful.

Buying isn't always better.

sassyjox

Mum_of_3 wrote: »

If the area is as bad, the house unsuitable and it's all making you as unhappy as you say then why don't you just sell the house, pay back the discount and move on?

Something else to think about before renting - if the area is a hole and getting worse then what kind of tenants do you think you'll attract?

M_o_3

We did consider this option but the house wasn't valued high enough to pay back the discount AND the mortgage.

I don't think the area is getting worse, I think its because our children are getting older and we worry about the influence it will have on them.

I don't care if that sounds stuck up! I want whats best for them and this isn't it!

sassyjox

We do have a family member who is interested in renting the property from us. So whats next? Do I apply for a consent to let once I have checked the deeds?

Cissi

sassyjox wrote: »

We did consider this option but the house wasn't valued high enough to pay back the discount AND the mortgage.

I don't think the area is getting worse, I think its because our children are getting older and we worry about the influence it will have on them.

I don't care if that sounds stuck up! I want whats best for them and this isn't it!

Of course you do - who doesn't? But be very careful before you throw good money after bad as that isn't going to help them either. You were hoping that the taxpayer would help you get something better for your children and now you're finding that this probably hasn't worked. I say cut your losses and sell if you can, starting over somewhere else - rather than risk getting deeper into a financial hole by becoming accidental landlords in a dodgy area.

sassyjox

Cissi wrote: »

Of course you do - who doesn't? But be very careful before you throw good money after bad as that isn't going to help them either. You were hoping that the taxpayer would help you get something better for your children and now you're finding that this probably hasn't worked. I say cut your losses and sell if you can, starting over somewhere else - rather than risk getting deeper into a financial hole by becoming accidental landlords in a dodgy area.

We wouldnt become accidental landlords. We would think about this very carefully before we take the step. We are taxpayers ourselves! This is not what we set out to do. We had an opportunity to get onto the property ladder and we took it. We work hard for our children and yes we want better for them and will do whatever it takes to get that. Somtimes people are restricted to what options they have.

Annisele

sassyjox wrote: »

We wouldnt become accidental landlords... This is not what we set out to do.

I'm afraid that's exactly what "accidental landlords" are - people who bought a property with no intention of letting it out, but due to changed circumstances are having to consider becoming landlords. The term doesn't mean "some idiot who decided to become a landlord without thinking about anything"; it just means "somebody who became a landlord without originally planning to be one.