Right to buy discount equity release?

Pixie5740

strawberries1 wrote: »

It was worth that when the tenant moved in. The value didn't suddenly jump relative to other properties. At the time the tenant moved in the property was worth a higher amount relative to other properties. On the BBC last week there was a woman spared jail for renting out her Hyde park council flat. Why does anyone need a council flat in Hyde park in the first place? People who grew up in that area living with their parent but priced out move to an area more affordable for them.

How do you know this 3 bedroom terraced house was worth £500,000 when the tenant moved in? If they are getting the maximum discount of £100,000 then that would indicate they have been a tenant for quite some time and that the value of the property wouldn't have been £500,000 when they first moved in. The value in the property hasn't sidedly jumped it would have been steadily increasing like the rest of London. This house could well be in an area of London that at one time wasn't so great but has now been gentrified.

As for the woman with a council property in Hyde Park, why shouldn't there be council properties in that area? She could have been given that tenancy in the 80s or early 90s. Should she have sub-let a council property....no but thankfully she has been caught.

Many first time buyers have to look at more affordable areas rather than their first choice, not just in London but all over the rest of the country, that just life. I'm sure their parents had to do the same.

Richard_Webster

If OP is entitle to the Right to Buy he/she wil get a discount and won't have to pay as much as £500-600K.

If a first mortgage lender lends no more than the purchase price (which will be less than the market value because of the discount) then if the buyer defaults it can sell the property and keep the amount owed to it before paying any discount back to the Council.

This means that it is not so risky for a lender to lend 100% of the price after the discount - I don't know whether any lenders are currently doing this but certainly mainstream lenders at one time commonly did this.

If OP enters into any agreement now with a third party to share the proceeds of an eventual sale, that is an immediate deemed disposal, and the whole of the discount is immediately repayable to the Council - so don't do that!

theartfullodger

Cake & eat it....

SunReader

strawberries1 wrote: »

Depending on the borough, most of the council properties are only valued at about 1/2 of their market value definately not the actual market value so it could be valued at £250 or perhaps £300.

On a side note, it beats me why anyone needing govt assitance would need to live in a £500k property when people who've never claimed benefits cant afford to buy half the value.

Works both ways, council's aren't keen on selling their diminishing stock, district valuers seem to do what they are told in my area, certainly regarding compulsory purchases.

Where does it say they are claiming benefits? 30 years rent has more than repaid the council's building costs. If RTB buyer had sunk the 30 years rent into a mortgage on a property in London no-one would be berating them for immorally making a packet.

RTB discount capped at 100k in London.

Buyer must be the tenant, how they finance it is I guess open to them, as long as the money was legal.

Most non-family investors would want to put a charge on the deeds to secure their investment. This could be a problem unless you want to move in and become a tenant. Anyone tried this?