Right to buy discount diminished

duckylaw

Hi there

First post so I hope this makes sense:

I am considering buying my ex-council house due to the new discount rates now being offered and have noticed a gross unfairness that I am wondering could be challenged. I have been a tenant for 20 years.

As I understand it, once the house is valued and the discount is removed, any repairs or improvements made to the house in the last 15 years are quantified and taken off the discount to come up with the price paid.

So, the house is valued with double-glazing, new kitchen, whatever the improvements are and then the tenant is charged for them a second time when their value is taken off their discount.So, in effect, paid for twice.

This can reduce the discount to zero.

Have I understood this wrongly? Do you think it can be challenged?

Ducky

mrs_motivated

I think what you are talking about is cost floor.

The value it, minus the discount and add back cost of improvements. This may not be as much as you think, has your property just undergone a decent homes programme?

Check the guidance notes with clg, this will probably explain it for you.

slscarborough

I am very interested in this as I have just applied for RTB. My property has recently gone through the decent homes programme - do you think we will lose alot of the discount? Does anyone have any experience of this?

seven-day-weekend

So...you want an improved and updated home for the same price as one that has not been improved?

slscarborough

seven-day-weekend wrote: »

So...you want an improved and updated home for the same price as one that has not been improved?

However I do not expect to lose all of the discount due to a few improvements.

seven-day-weekend

slscarborough wrote: »

However I do not expect to lose all of the discount due to a few improvements.

Well you probably won't lose it all. But obviously you will have to pay more than if it wasn't improved, just like anyone else!

This might be a useful read:

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_186973

duckylaw

"Well you probably won't lose it all. But obviously you will have to pay more than if it wasn't improved, just like anyone else!" seven-day-weekend

I understand that improvements will up the cost of a property and the valuation will reflect this as it would in any sale.

My issue is that these "improvements" (the kitchen was put in by such cowboys that it is a detriment to the house rather than an asset) are being counted twice: once at valuation and then deducted from the discount.

If I was buying a regular property, I would not expect to pay the asking price and then the vendor sends me a list of what all their improvements cost so i could pay for them again.

Like slscarborough, I would be interested in anyone else's experience of this.

Thanks

Lou

newbutold

duckylaw wrote: »

If I was buying a regular property, I would not expect to pay the asking price and then the vendor sends me a list of what all their improvements cost so i could pay for them again.

Like slscarborough, I would be interested in anyone else's experience of this.

Thanks

Lou

if you were buying a "regular" property you would not be getting a discount so you cannot really compare the to.

When my Aunty was looking to buy her council house(10 years back) they were updating kitchens & bathrooms, the local housing officer was quite clear in letting her know the cost of these would be added to purchase price, so my Aunt choose not to have hers updated.

I think you are trying to have your cake & eat it to be honest. Whilst you think it's not fair to you, is it really fair that the council update the property then you buy it at a substantial discount?

If you were looking to buy, you shouldn't of had the works done.

SavvyStudentSaver

I think I know what ducky law's getting at. Say the house was worth 100k without improvements, then improvements were made adding 10k to the value. Perhaps these cost 15k though, because not all improvements add value (or possibly more). Now, I don't know the discount, but for convenience, let's work with 20%.

So, the house it work 110k, and after reduction, it becomes 88k. Adding on the cost of improvements, it becomes 103k.

However, 8k of that money went towards the improvements anyway, and if the improvements we ignored in the initial valuation, it would have been 80k after discount, then 95k after cost of improvements is added.

However, in both of these situations, the council is selling a 110k house for less then market value, so I don't know if fair comes into it for anyone aside from the taxpayer. Unless this results in you being charged MORE then the houses value, I think it's ok (ie, a 10% discount would reduce price by 11k in our example, then when 15k for improvements is added, it goes UP to 114k).

PS, I have no idea how realistic any of this is, it's just an example.

Notmyrealname

slscarborough wrote: »

However I do not expect to lose all of the discount due to a few improvements.

Do you have any idea how much double glazing and replacing central heating costs?

Oh no you don't because the council paid for it.

You wouldn't get a lot of change out of £20k.

Fire_Fox

If the kitchen was substandard you should have brought the standard to the attention of the council at the time, if it genuinely needs replacing then presumably the valuation takes this into account. Which part do you think is unfair, the valuation in the house's current condition, or the cost that is being deducted for the 'improvement'?