Right to Buy for all Housing Association tenants - Advice needed

Marie2015

As the Conservatives have just got in we will now have the right buy our HA home as promised in their manifesto. We realise it may take them two years or so to get the housing bill in place etc that they need to push this through. In the meantime what do we need to do to be ready to apply for a mortgage? We have an overdraft and some credit card debt that totals around half our yearly household income. We would be looking to borrow around one times our household income on a mortgage and our discount would be 50% (we understand we can use the discount instead of a deposit).


I know we really need to clear the overdraft and start paying off the credit card debt. If we really tighten our belts we could be debt free in two years. Anything else we need to do? Should I close unused credit accounts etc? We have never been in the position to even think of applying for a mortgage so any advice would be appreciated!

laurasavon

I guess it depends what the criteria looks like when they come up with it. But certainly paying the debts off will be in your best interest and it wouldn't be a bad idea to save a deposit as they may want a personal contribution as well as the HA discount, you would also need to pay for a solicitor.

Marie2015

Thank you.

For the sake of argument if we still had £10k of credit card debt and wanted to borrow £40k on a £40k a year income would this be possible? Or would we need to be debt free? A 25 year mortgage would work out to be half our rent so we could afford a much shorter mortgage term too.

Pixie5740

If you can't be debt free with below market rent and no maintenance bills are you sure home ownership is for you? Owning your home costs more than just the mortgage repayments.

Marie2015

Pixie5740 wrote: »

If you can't be debt free with below market rent and no maintenance bills are you sure home ownership is for you? Owning your home costs more than just the mortgage repayments.

I am aware of the extra costs, although the HA have spent very little all on mainteinance over the last 20 years - like getting blood out of a stone! We have been daft with money in the past (too many nice holidays, car payments etc) but we now have a goal to work towards.

For what we pay in rent we could be mortgage free in 10 years. Also our rent is only around £50 a month cheaper than a similar private rental and we have to pay all our own decorating/carpet costs etc.

dreavi

I still don't understand the logic of this, won't the housing associations challenge this in the courts? If they go all the way to Europe then they might not get it done in 5 years let alone 2.

I wouldn't get your hopes up too high Marie, this has actually been a Conservative proposal in their last (I think) 7 manifestos

leveller2911

dreavi wrote: »

I still don't understand the logic of this, won't the housing associations challenge this in the courts? If they go all the way to Europe then they might not get it done in 5 years let alone 2.

I wouldn't get your hopes up too high Marie

I agree ,I would like to see a rule put in place so that anyone who takes up the RTB gives up any future rights to Social Housing. I personally know of 2 families who bought their Council Houses only to have them repossessed by the banks and they are now back in Social Housing.. It makes a complete mockery of the system.

I can't see this happening because the majority of the HA properties that were not previously Council houses were paid for by the HA and financed by the markets and not from central Government.. The houses have never belonged to the Government and they should keep though greasy mits off..

Marie2015

dreavi wrote: »

I still don't understand the logic of this, won't the housing associations challenge this in the courts? If they go all the way to Europe then they might not get it done in 5 years let alone 2.

I wouldn't get your hopes up too high Marie, this has actually been a Conservative proposal in their last (I think) 7 manifestos

I am not getting into a political debate, I just want advice so I am in the best position possible.

My other option is to do a mutual exchange of this house for a council one and then buy that, as council tenants still have right to buy, but I am hoping I can buy this one as it is my home.

leveller2911

Marie2015 wrote: »

My other option is to do a mutual exchange of this house for a council one and then buy that, as council tenants still have right to buy, but I am hoping I can buy this one as it is my home.

Not all of them, some have been closed to new tenants........ Best to check before you leap and if you can buy a CH you may well need to live in it for 3 yrs before qualifying. Then theres the ones with Section 102 notices on where you can never buy 100% of the property, these tend to be in rural areas.

Marie2015

leveller2911 wrote: »

Not all of them, some have been closed to new tenants........ Best to check before you leap and if you can buy a CH you may well need to live in it for 3 yrs before qualifying. Then theres the ones with Section 102 notices on where you can never buy 100% of the property, these tend to be in rural areas.

I have already taken advice and have been told my discount will just transfer and I can buy straightaway. This was from the council themselves in the area I want to move to.

Obviously my plans have been put on hold now as I would much prefer to buy this house.

leveller2911

Marie2015 wrote: »

I have already taken advice and have been told my discount will just transfer and I can buy straightaway. This was from the council themselves in the area I want to move to.

So why have you started a thread about the Tories manifesto proposal to give all HA tenants the RTB if you already have the RTB discount?........

If on the other hand you asked the Council "If the Tories give all HA tenants the RTB can I take my discount with me?" then I don't believe any council would say you could take the discount with you when they don't even know the qualifying criteria unless they have based it on the current RTB scheme which may be different from the one the Tories are considering.

I would get someting in writing from your council, they have a reputation for backtracking .