Right To Acquire - Housing Association property

hbmariner

Hi all,

I have tried to look through the forums to see if there is already any information on the right to acquire a housing association property. I do apologise if there is information on here but i could not find it.

Anyway, i am after a little info from anybody who knows anything about the right to acquire. I will give you a little background of where i am at the moment.

Myself and my partner have now been a tenant in our housing association property for 5 years and if i am correct we have the right to acquire our property. We applied before after being spoken to on the phone by one of these companies who do it for you. At the time we were refused due to not being in the property for 5 years, as the company talked us into applying stating it was only 2 years (will be doing it all ourselves this time). Although we havn't applied yet this time around, i am hoping that there will be no problems as it has now been 5 years.

We have been on the housing register for 18 months now for a move to a bigger house as we now have a boy and girl and we are only in a 2 bed house. However they have now changed the housing register so that you have to bid on a property. The problem being is that we are very settled where we are and my lad goes to school a stones throw away and the village we live in is very sought after and hardly any housing association properties become available. We do not want to move out of the village as my partner's family are all here and she works within walking distance.

We have looked into buying privately. We can afford a mortgage due to our income, however to get an affordable mortgage we need another £5k more on the deposit, otherwise we would have no money available to save each month. It would be double the amount we pay in rent now. However another £5k on the deposit and it would only be £100 more a month.

My housing association give a maximum of £9k off the price of the property. I do not know the value of my property but i am not expecting it to be above £100k due to other house prices in the area. Therefore i am looking at a possible price of £91k to pay.

Does this mean that i will only need a deposit of £1k to be get a 90% motgage and therefore a better rate. Or will i still need a 10% deposit on top of any discount given.

I have found alot of websites offering right to buy mortgages but none offering right to acquire. Are they one of the same or will i be struggling to get a mortage. I have already applied to my bank but they do not do that mortgage.

Does the discount go up or down depending on the years that you have been in the property? Or is it a fixed rate after you have been in for 5 years.

I am sorry if this is a bit long winded but i wanted to put all info in the text so that people could make a valued answer and not have to ask further questions. But if you need to ask, fire away.

Thanks ever so much for your help.

Wee_Willy_Harris

Because of the way the discounts are awarded and the payback if you sell the house within 5 years of excersisng your right to aquire, most mortgage lenders will base their deposit requirements on the price paid, rather than the open market value (there are exceptions, but not many). Due to the historic risk with right to buy/aquire, you may find the better interest rates demand the biggest deposit. Tread carefully with anyone offering you a mortgage with a deposit of barely 1%. After all, your rent is very affordable at the moment so it may be better to wait and save for a bigger deposit while the mortgage market eases up abit. There's no rush.

NOTE: If your property was built or bought with public funds by a housing association prior to 1 April 1997, you may not have the right to aquire it.

hbmariner

Wee Willy,

This is exactly the position i am in at the mo. I can have an extra £5k in 2 years to add to the deposit.

But if i could buy a property now, then i can be 2 years further up the property ladder. I am willing to put in more than just 1% deposit but i was wondering due to already having 9%off the price would i still need another 10% deposit. If i did then i would maybe look at saving for another 2 years and going for a 3 bedroom. But that is 2 years away and many things could happen in that time.

Also my property was built around 1930's and was passed from council to housing association in 2005

Wee_Willy_Harris

hbmariner wrote: »

...............

Also my property was built around 1930's and was passed from council to housing association in 2005

Then you will almost certainly have the right to aquire. The rest of my posts still holds true. Suggest you approach your HA for a valuation and look into what mortgage products may, or may not, be available to you. Once you have that information, your decision may be easier than you imagine. Whatever you decide, you are a secure tenant and as such have the luxury of time on your side. It may not be the right time now, but waiting a while longer while paying affordable rent is an option many would dream of. There's really no rush!

hbmariner

thanks for your quick answers

once you apply for the right and turn them down, can you apply again at a later date.

Wee_Willy_Harris

hbmariner wrote: »

thanks for your quick answers

once you apply for the right and turn them down, can you apply again at a later date.

Yes.......

poppysarah

You're in a house you know will be too small for you in a few years and yet you want to buy?

Are your jobs secure?

mr_fishbulb

I really don't understand the right to buy thing. Surely these houses were built to provide people who couldn't afford housing with somewhere to live? Letting people buy them means that there is one less house available to people who need affordable housing. Unless it's like those sustainable forests where they build a new house after one is sold through RtB.

Surely if someone is now in a position to buy somewhere, they should give up their HA place to someone who needs it, and buy somewhere else.

This isn't a dig at the OP - you're just doing what is available to you.

tbs624

See here, here and here for further info on RTA

hbmariner

poppysarah wrote: »

You're in a house you know will be too small for you in a few years and yet you want to buy?

Are your jobs secure?

My plan is to apply for planning permission at the same time to extend the property to 3 beds. If planning can be granted then i will buy and extend at a later date when finances are better.

Basically we love where we live, we have great neighbours, we are within walking distance from everything in the village and also both schools. We dont want to move out of the village but by staying with the housing association and trying to find a bigger property through them is like winning the lottery. When we moved in 5 years ago, the guy said this was only the 8th house in 9 years that had been rented out in my village. Bearing in mind 6000 people live here there are alot of houses to choose from but nobody wants to move.

Thankfully i cannot be made redundant from my job and my partner only works minimal hours due to us having an 18 month old child so we are pretty financially stable in that regard. The problem with finances is that to make it affordable to own our own home we will need a 15% deposit which is anything over £15k. With 2 children we just cannot save that amount of money.

mr_fishbulb

The right to buy aspect is to allow people who need affordable housing to live in them and then to make their way onto the property ladder, otherwise they will never be able to better themselves. They do build new affordable housing, and in my area every new housing development has to allow the council/housing association purchase a set percentage of the properties. This is therefore replenishing the stock that is lost through RTB or RTA.

Also like i have said above, I cannot afford the £15k for an affordable mortgage so i am not in a position to buy somewhere else. I can only afford this property due to the possibility of receiving a £9k discount on market price.

Doozergirl

hbmariner wrote: »

This is exactly the position i am in at the mo. I can have an extra £5k in 2 years to add to the deposit.

But if i could buy a property now, then i can be 2 years further up the property ladder.

For every £1 you borrow on a mortgage, you look to pay £2 back to the lender. If you were in a privately rented property paying market rent then it might not make an awful lot of difference as mortgages tend to compare to rent. As it stands, if you physically save the extra that you are currently saving on a reduced rent, then you stand to be 'higher up' the ladder in terms of equity/capital in a few years than if you jump straight into a mortgage now with a very low deposit. The vast majority of what you pay will be interest for a very long time to come.

You're in no hurry. You are secure in your home, which is what most people buy for! Frankly, I'd use the discounted rent to help you save more capital which you mentally put towards paying off your house; you just pretend the rent is your interest payment and you put away the capital into a savings account. The one day, when you're ready and have a lovely fat deposit, you take the plunge and buy it.