Buying a defective council house

bestyman

Hi all,
We have lived in a council house for 2 years and now have the right to buy . We get 30% discount so for once in my life I thought my luck was in , the idea was to stay here a few more years and save up then buy something better after selling the house for a good profit.

Today we got a letter from the council saying that the house is `designated as defective under the housing act1985` this is because the house is of concrete slab construction and substancial repairs may be required in the future. The house has not yet been valued by the council .

Any advise please considering the following.
1. houses in our street sell for 80k but as far as I am aware mortgages are difficult if not impossible , any ideas about how to raise funds??

2. The cost of the repairs is around 25k , so in effect if the cost of the house is less than 55k with discount I should still buy it? ( thats 80k value less 25k repairs needed) The council have no plans to repair within the next 10 years so I wouldnt be in a hurry to do the work. A lot of houses around here like mine get `bricked up` , none of them get demollished or fall down so it seems a safe bet.

3. In the long term say I buy the house then want to move but the house is difficult to sell, could I rent it out for say £500pcm ( or the going rate around here) then still buy another house on a mortgage?

Has anyone out there bought a council house like this?

I suppose the bottom line is what the council will sell it for, I find this out in a few months but any input appreaciated. I don`t want to go to one of the specialised `buy your own home` companies as they seem to treat everyone like an idot with a 2k arrangement fee and interest rates that would certainly not rate very well in martins best mortgage buys. I realise some of the mainstream lenders will not help with this but still want a reasonable deal.

Thanks

Mark

mando_2

With it being `designated as defective under the housing act1985` does this mean it is going to be knocked down or the area around you will be? This could mean that all the houses around you are demolished and the council could put a compulsary purchase on your house - how much they pay I don't know?

Personally I wouldn't buy a council house - they are the first to loose money. If, as many people are predicting, there is a down turn in the housing market, they will be the first to nose dive as they are classed as the "less" desirable (sp?) of houses.

Lally

My brother is looking for his first property and recently we have seen some '4 in a block' type ex council houses, and the details states that they are only available to cash buyers.

Its due to their construction, the Act you are talking about, and im told that you cant get a mortgage on such properties. So he has decided against it

zzzLazyDaisy

I wouldn't touch it with a barge pole. You will never sell it. It is one thing putting a house up for sale at a given price, it is another thing altogether finding a buyer........

Would it be possible to get a council house exchange to a house of standard construction and then buying that one?

ducky2004

Heem...any house will sell at £10......

Noozan

My sister in law's sister purchased a council property about 2 years ago. The property they wanted had the same problem too. The house needed about £30k of work done to it before anyone would give them a mortgage. They successfully negotiated with the council (unsure of what terms they used though) and they only had to contribute just over £6k of the remedial work and got a 40% RTB discount.

Not sure what part of the country you're in, but they live in a desirable part of Cornwall where they had no chance of buying on the open market and the council house was their only realistic option of getting on the property ladder.

Pollen

You need to find out what the problem is - to me it would suggest mundic block aka concrete cancer. Some parts of the country are prone to this details here - other sites available. Houses which are are affected can be unmortgageable depending on the grade found, although this is now changing (probably because so many are still standing). You may have a problem in the future should you decide to sell and move on. I suggest you start doing some research before reaching a decision. Hope this is of some help.

bestyman

Hi all,
Thanks for all the ideas.
Really its the option we have at the moment . The council did say that If we showed them 3 declines from mortgage lenders then they would do us a mortgage. I suppose in any event its better than paying rent????

I`ll post back when I know the price.

Cheers

Besty

Paul_Varjak

New rules on buying Council houses come into force soon. I have just read about them. No sure how they would affect you as you have qualified under the old regime anyway. Also, as if live in Scotland, I don't know if the rules are different there.

I suggest you contact your local Council and get details of the rules.

VH

I think what the Council could be referring to is a type of house known as a 'no-fines concrete' dwelling. There was a period around some 50 years ago when a number of councils experimented with a cheaper method of construction, by basically bolting large concrete slabs together to form houses.

There are lots of these types of houses where I used to live. They do not have cavity walls and therefore are cold and difficult to insulate. Also because they are constructed from solid concrete panels, there is no room for expansion and settling, and the concrete panels crack due to movement - for example subsidence.

On the plus side, most of these houses will not be affected by this problem. I know at least 5 ex-council tenants who have bought these houses and they have not had any problems with them. It will depend heavily on the area and whether your street is prone to subsidence or not. None of the people I know have had difficulty getting a mortgage on these properties. After all, your insurance covers them from falling down, same as every other house.

If the property has been standing for a long time already then you would have more than likely already seen problems if the house was going to start falling apart.

Of course you may have a completely different type of house to this, in which case ignore the above!

A lot of people assume that Council Houses are shoddily built and will fall apart at the drop of a hat. This is nonsense. They are as good, if not better, than any other property you will find. You will always get shoddily built houses but this applies to both Council and privately built.

thaylock

I purchased my council house back in 1990, it was also designated as defective but fortunately I was able to pay cash for it so didn't have to take out a mortgage. If I were to sell the house I would have to get it re-bricked because it is not mortgageable in it's current state. I believe Birmingham Midshires are one of the mortgage companies that will give you a mortgage on one of these defective houses, but you will have to take out a further 25k to get it re-bricked, I don't think there is any way around this unless you are a cash buyer. Personally if I were you I would give serious consideration about purchasing the house & get it re-bricked, the nice thing about getting a house re-bricked is that you can pretty much re-design the ground floor of your property to suit your taste. Also as more more & more council houses become private, the value of the houses in your area will increase, I also found renting the property to be no problem at all because the rent is affordable (I have been renting the house for the last 8 years & charge £500 pcm). People use to take the mick out of me for living in a council house, but who's laughing now !