Right to buy / joint mortgage with non tenant

bracken1984

I currently live in a housing association house in which I've earned the 'right to buy'. I'm planning on moving out but my mother is keen on buying the house as a buy to let. She can definitely afford a mortgage however I cannot. We would be approved for a joint mortgage on her finances alone, but my name would have to be on the mortgage as the right to buy is in my name only as she lives elsewhere. Does anyone have any idea weather we would be allowed to buy this house with a joint mortgage but only my name on the deed? The reason only my name would be on the deed is because the housing association will not let me jointly buy the property with someone who is not a tenant.
Thanks.

kingstreet

There are one or two lenders who allow more borrowers than there are parties in ownership but there is no way you'll get a BTL on a RTB. That's a non-starter.

bracken1984

Thanks for your reply.

Yes, it makes sense that you can't get it with a BTL mortgage! Could we buy it on a' normal' mortgage and then let it? And also, do you have any idea which lenders would be willing to give a joint mortgage for a singly named deed? Bearing in mind that I am financially defiantly not able to afford a house by myself!

I'm thinking that this whole thing is a bit of a non starter really, but the discount I'm eligible for on the house is £16,000 off the market value, so we'd be silly not to at least think about it!

kingstreet

You should not purchase using a residential mortgage when you intend to let the property. Morally, you should not be buying with the RTB discount, with the intention of letting and living elsewhere.

Brokers on here don't name lenders, for fear of being seen to be "advising" so you will need to conduct some research, if you are planning to proceed.

If this is a HA, are you sure you have right to buy, not right to acquire?

bracken1984

It says right to buy on the forms they've sent me. The housing association bought this (and a lot of other houses) from council stock during my tenancy, so I think that's why?

Actually, yes, I do agree with you on the point of it being morally wrong to buy through the rtb and let this house. I feel a bit like it's an abuse of the system myself too. But then I'm a little swayed by the fact that it could be a really good investment and somewhere I could possibly move back into in the future (long story).

Mojisola

Check the terms and conditions. I don't think you'll be allowed to buy it, move out and then rent it to someone else.

kingstreet

bracken1984 wrote: »

It says right to buy on the forms they've sent me. The housing association bought this (and a lot of other houses) from council stock during my tenancy, so I think that's why?

Actually, yes, I do agree with you on the point of it being morally wrong to buy through the rtb and let this house. I feel a bit like it's an abuse of the system myself too. But then I'm a little swayed by the fact that it could be a really good investment and somewhere I could possibly move back into in the future (long story).

It sounds like a preserved RTB from when the council was your landlord. Just wanted to check.

bracken1984

I don't know where to find this information. There are rules about selling it on within the first 5 years, giving them first refusal or paying back the same % of discount as you revived etc. However I can't find anything about having to live in the house after the purchase (possibly I am not looking hard enough), buy I'd assume that as it would be mine and I could do as I wanted with it?

Mojisola

bracken1984 wrote: »

I don't know where to find this information. There are rules about selling it on within the first 5 years, giving them first refusal or paying back the same % of discount as you revived etc. However I can't find anything about having to live in the house after the purchase (possibly I am not looking hard enough), buy I'd assume that as it would be mine and I could do as I wanted with it?

Phone the HA up and ask them?

Senior_Paper_Monitor

1) Mortgage can only be issued in names of tenants defined by inclusion on the Section 125 Notice (and must include all those listed) - from your description their is no way she will qualify for this

2) The Council/HA actually don't care (and can't control) if you rent it out (unless a leasehold property where the freehold might prevent this) - BUT the mortgage company will and no lender will give permission to let on a residential right to buy

3) NO lender will give a BTL mortgage on a RTB property during the 5 year claw back period.


Dead in the water without even considering the moral questions raised by other contributors

bracken1984

Thanks senior paper monitor, it would be only my name on the section 125 and therefore the deeds as I'm the tenant, the HA have already told me this. I don't really see how the mortgage could be issued based on the names on the section 125, how do you know this? Sorry, I'm not trying to be difficult, I just want to make sure I have all the facts right before making any decisions. Because apparently you can get a joint mortgage/single name on deed and I believe some lenders would be happy with this? Would that not apply in these circumstances for some reason?

Also I don't understand why a mortgage lender wouldn't give a BTL on a RTB though unless it was illegal to buy a RTB on a BTL? I would assume that as with any other BTL mortgage that as long as the finances are there to cover not receiving rent that it would all be dandy? Would it not be more likely that a term of the section 125 is that you cannot have a BTL mortgage?

Morally, I agree it is at least questionable to buy discounted social housing and let for a profit, and I personally do feel a bit bad about it, but I'm not sure that banks are not generally known for their high moral stance, hence my questioning. (Again, sorry!)