Selling ex council house

pocket8s

Hi All.

I am selling my ex council house, it wont be 5 years until December 2015. So i am aware i will have to pay back discount.

If the sale completes for example in November, would i just have to pay back one months worth of discount? (not a whole year)

Any ideas how to work out what would be approximately need to be repaid, is there a maths sum

Thanks
x

HappyMJ

Why don't you wait until December? You can list it for sale now on the condition the property sale does not complete until the 5 years have passed in December.

Leo2020

From here https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

"7. Selling your home
If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either:

your old landlord
another social landlord in the area
The property should be sold at the full market price agreed between you and the landlord.

If you can’t agree, a district valuer will say how much your home is worth and set the price. You won’t have to pay for their valuation.

You can sell your home to anyone if the landlord doesn’t agree to buy it within 8 weeks.

Paying back your discount
You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

80% of the discount in the second year
60% of the discount in the third year
40% of the discount in the fourth year
20% of the discount in the fifth year
The amount you pay back depends on the value of your home when you sell it."

lincroft1710

As it is now August, you will be very fortunate if the sale completes in November.

pocket8s

Hi All.

Thanks, i am hoping not to complete until the 5 years are up but that depends if my buyers will wait. They offered me 10,000 more than 3 agents valued it at as they fell in love with it. So dont really want to lose them.

I have already offered it back tot he council who have told me on the phone they have never bought one back but will put it in writing to me.

Leo - So i would have to pay back 20%? even though there will probably be only 4-6 weeks left until the 5 years are up. Would i not be liable for 4-6 weeks worth of payback

Thanks

Leo2020

pocket8s wrote: »

Leo - So i would have to pay back 20%? even though there will probably be only 4-6 weeks left until the 5 years are up. Would i not be liable for 4-6 weeks worth of payback

Thanks

From reading it seems that you have to pay back 20% no matter when you sell in the 5th year. Really you need to speak to someone who deals with this sort of thing. Have you called the council you purchased the house from?

drdpj

The 1st year of ownership starts immediately from when you bought it, therefore if you bought it more than 5 years ago, you're then in the 6th year of ownership, not the 5th.

clw1

As Leo says call the council and check.

If you do have to wait until December then it might be an option to exchange as soon as you can but set the completion date for December. That way both you and the buyers are tied into the sale and they won't walk away from it. (NB you might need to offer a slight discount to get them to do this - say £5k but you'd still be better off than the agent valuation or % reduction).

Mokka

Unfortunately the discount repayment will be for the whole year, not calculated on a monthly basis, so it makes so much more sense for you to wait. You need a letter from the council stating they are not interested in buying it back before you can proceed.
Your buyers will have the same obligation and some lenders do not like this, so your buyers might find it more difficult to get a mortgage than they thought.
Also the 20% discount repayment is of the current sale price, not the one you bought at, so the more you get for the house, the bigger amount the 20% will come to.

pocket8s

Exchanging with a slightly delayed completion is a great idea!

Im a bit confused about the discount repayment is it 20% of the sale price or of the discount received.

I bought the house for £74,000 with £26,000 discount. Being valued at £100,000.

I have agreed a sale at 125,000

Thanks

theGrinch

you should do the right thing regardless and make a big donation to the taxpayer for helping you