Selling my council home

elfreda69

The rent for my housing association flat will go up from £850 to £1500 pcm next year as my husband and I earn over the £40,000 threshold (I earn £25k and my husband £16k). We are newly married as I was a single parent for 15 yes previously and lived in the flat with my kids.
I think that we will be better off buying under right to buy and getting a mortgage (it would be around £1200 pcm). We live in London and the flat is valued at around £350,000.
We will get a £100k discount.
I feel no choice other than to buy the flat but will seek to sell it after 6 years and move out of London where we could buy property for £250,000.
My question: I hope to sell the flat in london after 6 years and use the equity (£100k) to buy something outside of london for £250k thus reducing my mortgage from £250k to £150k. Will this be allowed by mortgage providers?
Please do not post comments about the morality of right to buy.

tomtontom

Of course you have other choices - find somewhere else to rent, or move out of London and buy now.

Have you even looked at mortgages? You're very unlikely to get near to £250K with your current income.

Senior_Paper_Monitor

Be aware that:


1) Pre-emption rights continue for 10 years and during the years 6-10 (although there is no clawback) the new purchaser may have (based on current criteria) limited funding option available to the, The majority of lenders (currently) will not finance properties with pre-emption in place.


2) Depending on the detail - the nature of the flat may further limit the funding options for any new purchaser.



Other than the above considerations you have a general understanding of the options (although you may struggle on affordability for the first purchase).

silvercar

Easiest is to drop joint income below the threshold, maybe pension contributions can achieve this?

elfreda69

Could you clarify your points about pre-emption. I have not heard of this before.

elfreda69

Senior_Paper_Monitor wrote: »

Be aware that:


1) Pre-emption rights continue for 10 years and during the years 6-10 (although there is no clawback) the new purchaser may have (based on current criteria) limited funding option available to the, The majority of lenders (currently) will not finance properties with pre-emption in place.


2) Depending on the detail - the nature of the flat may further limit the funding options for any new purchaser.



Other than the above considerations you have a general understanding of the options (although you may struggle on affordability for the first purchase).

Could you clarify these points pls. Pre-emption is something new to me.

elfreda69

tomtontom wrote: »

Of course you have other choices - find somewhere else to rent, or move out of London and buy now.

Have you even looked at mortgages? You're very unlikely to get near to £250K with your current income.

Thanks for your response, I have a family member who will be one the mortgage. The total income will be around £50k per annum. Still a struggle, but manageable.

missbiggles1

elfreda69 wrote: »

Thanks for your response, I have a family member who will be one the mortgage. The total income will be around £50k per annum. Still a struggle, but manageable.

So you'll be buying jointly with this family member - what's in it for them?

dimbo61

Is your flat suitable for banks to Lend on ?
High rise ? Non standard construction ? Materials that may cause problems ie asbestos, concrete panels etc
Will you want to live there for another 5+ years ?
If you have the Right to Buy and discount having paid rent for over 15 years and you can get a mortgage consider a 5 year fix to protect yourself from Interest rate hikes.
Good Luck to you and your family.

Senior_Paper_Monitor

1) Pre-emption (in this case and in simple terms) is the entitlement of the council to buy back the property at market value (which lasts 10 years)


2) Is the 'family member' entitled to be part of the RTB purchase/mortgage (i.e - again in simple terms - primary residence there for last 12 months) ?