Can I let out my right to buy council house.

claireablast999

BitterAndTwisted wrote: »

If you don't like where you live what makes you think anyone else would want to pay enough rent for you to be able to cover the mortgage payments for it?

I live at the end of a cal-de-sac in a small town with good employment rates and friendley feel I wish to live in a bigger town with better schools. many people like where I live so I don'y think that will be an issue thank you!

mirrorimage0

i was informed when i bought mine that as soon as it was bought i had the right to move out and rent it out, this was from the guy at the council.
i originally bought it as i was a single mum to two young boys who was working and i wanted to make a start on the property ladder so had no intentions of moving out but after a couple of yrs my partner moved in and we then decided to buy a bigger place, so we rented out my flat. i am with the halifax and it was easy to change to a buy to let.

you can sell it at any time but if you sell it withinthe first five yrs you have to pay back a % of the deposit plus something else (cant remeber what its called sorry )

dont forget if you are planning on keeping it long term to let out and you buy somewhere else, when you do eventually decide to sell it you will have to pay capital gains tax.

there can also be many problems with being a landlord/lady. so far i have been lucky (and it is just that, luck) but have heard many horror stories,
you need to have gas and electric certificats,plus landlord insurance and have the deposit held by a secure agent, and provide the council with evidence of this (but this may only be for flats as its to do with the insurance on building)

this is just off the top of my head butthere will be other posters with more info im sure, research everything, keep an emergency fund for the property incase of problems and good luck in what ever you decide. x

Hump

Assuming you're in England or Wales RTB discounts have been capped for a while, the areas that gets to £38k are almost all in the South East of England - which means you really need to give serious thought to whether you can afford to cover 2 mortgages in this far from cheap area - one of which will be on a non-discounted market value property. If you're not in the SE (or Barking & Dagenham or Havering) then http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_186973 covers likely discounts (most of which are substantially lower even for tenants who have many years to add to the discount). TBS624 has a point. Even experienced landlords have void periods and get tenants who choose not to pay rent - it can take a minimum of 3-4 months to get rid of a bad payer through the courts after they miss a payment.

Alias_Omega

claireablast999 wrote: »

I really don't like where I am living right now and we are working hard to save for a deposit for a mortgage. If we were to buy our council house we would most likely get a £38000 discount and it would be really silly of us to take take up such a great offer. The problem is we don't like where we live and would like to know if we can use the right to buy and then rent the property out.

Hi,

We did the same though not for profit. (a long story about sub-standard quality and repairs not being carried out)

We received a £22,200 discount from the property, remained in the property for 12 months before having to move away from it. As we knew we would eventually have to move from the house, we checked the deeds for the house. The deeds stated that we could not sell the house, or leasehold the house. Nothing else was stated apart from the repaying back of the discount, within the first 5 years with selling back to the local council at market value within the first 10 years.

We had a residential mortgage with nationwide, and applied for a consent to let. We wanted to have it right. We had a low LTV so the consent to let was granted for 3 years. We later recieved a letter saying that interest rates would be increased on the mortgage, but we were exempt from the increase as a goodwill gesture.

The purchase price was £38,800 with the mortgage just over £40,500 in all with all the fee's added onto it. We took the mortgage over 20 years, so it came out at just under £300 per month which we fixed at 6% for 5 years (the discount period).

We put the house up for rent with a large local agent, and took note of the prices in the street. We undercut all the houses in the street with the rental price of £390 (Rent to the council was £296 pcm), and the house was taken within a day.

claireablast999

Thanks Hump im in the south east and can get £38000 discount. RTB will work out at around 500 pm and we have had a look around at an area we would like to live in and there are some 2 bed flats with back garden near good schools for around £95000-£105000 so my thinking based on limited research is, if we buy the right to buy we SHOULD be able to pay the £500 mortgage, cover all the bills and shopping and still be able to save £1000 pm for a £20000 deposit in two years time leaving us with a little for fees ect. So if and when we buy the 2ed propety it in two years or so the 2ed mortgage based on todays prices would be around £515 making the outgoings for the two mortgages a little over £1000 ish. OMG i think im turning in to one of those growen ups! lol

Hump

Sounds like you've done the math! Good luck!

kier333

No wonder there is a shortage of quality social housing with people claiming the RTB, then letting out the property, or selling it on. I personally think the Government should change it all and remove the RTB on any Social property. I understand people wanting to get on the property ladder, however it would be better to give tenants a 10% deposit with the conditions they are exempt from having social housing for a min of X amount of years if they were to default on there Mortgage etc. This would also free up properties for young family who cannot afford to buy.

I'm sure many people will disagree.

claireablast999

Kier333 I agree with you. It would make my life more stright forward if I could just get the discount off a place I would like to live. I know someone that got a big discount off of there house through something like this. It was around 16 years ago and I don't think the deal has been around for many years.

kier333

claireablast999 wrote: »

Kier333 I agree with you. It would make my life more stright forward if I could just get the discount off a place I would like to live. I know someone that got a big discount off of there house through something like this. It was around 16 years ago and I don't think the deal has been around for many years.

Glad you agree,it just seems silly people have to go down this route, it must surely be more cost effective to keep the Social property and give the Tenant an incentive to purchase a property they really want to live in.

Well who knows maybe it will change, I just think its all crazy as there are such shortages on social housing.

Turnbull2000

Go for it. Will likely be a money spinner in the medium to long-term.