Right to buy housing association flat

jw30

Quick question my partner has been living in her flat for around three months now and her landlord said she can buy the flat in 5 years time at a discounted rate.

I understand its along time to go but what sort of discount would she get? I researched house prices in the same place she lives on the ground floor also!. The minimum 2-3yrs ago was £105k and max was £122k.

Now according to directgov site max is £26k but it also says for 5yrs as a public sector tenant 50% discount?

Lastly if i went on the tenancy as a joint tenant for 5yrs if we saved up say £15k deposit plus the £50k discount that would be possible a mortgage for 40% of the value. How long after the discount do you have to wait to remortgage or sell to realise this equity?

Sorry about the vast number of questions but need to know

TrickyDicky101

I personally wouldn't touch an ex-HA or council flat with a barge pole. You will get screwed with the Service Charge and you will be responsible for all repairs. It isn't worth it.

jw30

Ah found out its another 5 years until you can sell on without losing the discount year 1 100%, year 2 80%, year 3 60% year 4 40%, year 5 20%.

Maybe worth keeping then just to rent out after buying it 5yrs of a tenant paying the mortgage hopefully!

jw30

TrickyDicky101 wrote: »

I personally wouldn't touch an ex-HA or council flat with a barge pole. You will get screwed with the Service Charge and you will be responsible for all repairs. It isn't worth it.

She doesn't pay a service charge at the moment and the rent is quite low £360pm.

How could i find out what MUIR HOUSING charge for service charges?

jw30

Oh I get it so if she becomes a owner rather than a tenant she is responsible for any repairs the housing association want or need to make! sheesh could be anything that!! do they have to give her notice of their intentions for 5yrs before? for scheduled maintainace or repairs? boom there goes that discount! sneaky!

poppysarah

Rent low and fairly secure so why risk it?

jw30

We looked on right move and other flats over a long period range from 64k in 2001 to 140k in 2006 one person bought one in may 2002 £68k and then sold £129,950 in july this year thats an excellent return in my book.

Not a risky as there arent too many options for a first time buyer with £15k most homes in our area are £100k+ obviously the service charge/contribution to maintainence is a big worry.

If she stays saves and buys after 5yrs at half price in 10yrs she could potentially make a tidy sum too or a hell of a lot of equity for buying somewhere else

ILW

Where have you got this 50% discount figure from. Thought it was only about 20% max now.

Running_Horse

jw30 wrote: »

She doesn't pay a service charge at the moment and the rent is quite low £360pm.

How could i find out what MUIR HOUSING charge for service charges?

Pick up the telephone and ask them? Assuming she wants to. Why the cloak and dagger? She could ask about the discount too; after all they did freely tell her about it.

princeofpounds

The discounts are decided on a local basis, there is no national scheme. They used to be really high but are more like 20% now.

There are pluses and minuses to RTB. The plus is being an owner and getting some kind of discount. The minus is that you lose an exceptionally secure type of tenancy that is not far off owning in terms of security and is usually somewhat subsidised. You take on all the costs and risks of ownership, such as paying for repairs and also the exposure to house prices that can go up or down, and also the mortgage debt and the chance of losing your home if you cannot repay it.

Plus, often the HA or council remain freeholders (owning the land and some/all of the outer structures), just selling you a leasehold. They can then make you take part in works to fix/improve the whole area (such as walls or windows). In itself this is not unusual, but they have a reputation for hiring poor value contractors and not listening to leaseholders views, but if they aren't paying for much of it they don't really care.

To put it bluntly, council/HA tenancies are pretty cushy and not to be thrown away lightly, although I cannot tell you what the right decision will be in 5 years time!

Hammyman

jw30 wrote: »

We looked on right move and other flats over a long period range from 64k in 2001 to 140k in 2006 one person bought one in may 2002 £68k and then sold £129,950 in july this year thats an excellent return in my book.

...if you bought in 2002 and sold now. But she wouldn't be. She'd be buying in a few years time and selling 5 years later. FWIW, after the 1990's recession house prices remained fairly static for about 8 years with very slow growth. It certainly wasn't a doubling and for the highest rises, the houses were still affordable. To get a similar return you'd be buying at £130k now and expecting to sell over £275k in 8 years time. After the banks got their hands burned over the last decade, do you really think thats an option?