Can I rent out my right to buy property within the first 5 years?

globularity

I am currently in the process of purchasing my 1 bed flat on the right to buy scheme. Just wondering if my circumstances change (get married) and need a bigger place can I rent it out during the first 5 yrs when my discount is still in the hands of the housing association. I would legally need to get a buy to let mortgage, how does that work with the discount I recieved from the housing association. At the moment I have no plans to move out but am just wondering. Also I never plan on selling this flat.

Yorkie1

I'm fairly sure I've read that there are no BTL mortgages on RTB properties, and CTL is likewise rare.

theartfullodger

If it is Housing Assoc I think it is "Right to Acquire" not RTB.. see...
https://www.gov.uk/right-to-acquire-buying-housing-association-home

You would not be permitted to rent it out in the initial 5 years - AFAIK. Check with the housing association terms & conditions for RTB - sorry I can't read your copy from here.. Please let us know what it says..

If you want somewhere you have that flexibility to rent out whenever you like, buy somewhere else at the normal market price.

If you want a large discount paid for by the rest of us tax payers sorry, but there are some restrictions..

kingstreet

globularity wrote: »

I am currently in the process of purchasing my 1 bed flat on the right to buy scheme. Just wondering if my circumstances change (get married) and need a bigger place can I rent it out during the first 5 yrs when my discount is still in the hands of the housing association. I would legally need to get a buy to let mortgage, how does that work with the discount I recieved from the housing association. At the moment I have no plans to move out but am just wondering. Also I never plan on selling this flat.

Many councils hived off their housing stock into housing associations and they became registered social landlords, as they are known.

If you purchased a freehold house, chances are you cannot be prevented from subletting. If you have a leashold flat, you will need the freeholder's permission to sublet.

On to the mortgage. You do not need a BTL mortgage. You need to ask your current lender for consent to let. This may be declined, or accepted with a rate increase, fee, or both.

Mrs_Optimist

I personally know someone who is buying a £112k flat (council owned not HA) for £40k and renting it back to the council who have tenants lined up ! She has been in the flat for 12 years but has met someone who has his own flat and has also just purchased a house for them to live in together (neither of which were council owned).

They will live in the house and rent both flats out. She resides in her council flat (which has just had a brand new bathroom installed courtesy of the council) whilst RTB is being processed, for paperwork reasons. She has to pay a percentage of the discount back if she sells on in the next 5 years but not if she rents it out.

ETA I don't know if she has a BTL mortgage or not.

Lucky her - a £72k subsidy from the tax payers on top of subsidised rent for the past 12 years, and guaranteed tenants from the council who are screaming out for empty properties because of the RTB scheme! Utter madness !

monty-doggy

Mrs_Optimist wrote: »

I personally know someone who is buying a £112k flat (council owned not HA) for £40k and renting it back to the council who have tenants lined up ! She has been in the flat for 12 years but has met someone who has his own flat and has also just purchased a house for them to live in together (neither of which were council owned).

They will live in the house and rent both flats out. She resides in her council flat (which has just had a brand new bathroom installed courtesy of the council) whilst RTB is being processed, for paperwork reasons. She has to pay a percentage of the discount back if she sells on in the next 5 years but not if she rents it out.

ETA I don't know if she has a BTL mortgage or not.

Lucky her - a £72k subsidy from the tax payers on top of subsidised rent for the past 12 years, and guaranteed tenants from the council who are screaming out for empty properties because of the RTB scheme! Utter madness !

Utter madness!

Good for her as she's been allowed to do it, but it really does beggar belief!

Mokka

I can only give advice on RTB not RTA, but I am quite sure you do not need the freeholder's consent to let your flat out.

If you will be getting a mortgage it is worth checking if they would issue permission to let, if requested, or ask for it outright (if it does not mean paying higher interest). The problem for the bank is that the rent from your RTB flat might not cover your mortgage payments, so it's more risky for them.

If you search this forum for 'remortgaging RTB' or 'FIRST CHARGE ON THE PROPERTY" you will find that it can be tricky to remortgage RTB property in the first 5 years.

I am pretty sure you can't get a BTL mortgage on a RTB property.

DAZKIM

We bought our flat on the right to buy scheme 4 years ago and have now sold it. We are having to pay back some of the discount to the local council but they did say that I could rent it out until my 5years where up without a problem.

Cheers

globularity

theartfullodger wrote: »

If it is Housing Assoc I think it is "Right to Acquire" not RTB.. see...
https://www.gov.uk/right-to-acquire-buying-housing-association-home

You would not be permitted to rent it out in the initial 5 years - AFAIK. Check with the housing association terms & conditions for RTB - sorry I can't read your copy from here.. Please let us know what it says..

If you want somewhere you have that flexibility to rent out whenever you like, buy somewhere else at the normal market price.

If you want a large discount paid for by the rest of us tax payers sorry, but there are some restrictions..

I'm a tax payer so I guess i'm paying for the discount too lol