Buying Mum's Council House

carolann312

Hi

My mum has lived in her council house for over 50 years and has received a leaflet from her Council re Right To Buy. I should imagine she will get quite a large discount due to the time she has been a tenant (I could be wrong - don't know much about how this works) and the family were wondering if it would be possible to get a mortgage between us to buy the house for mum. There are 4 of us and 3 of us already have mortgages on our own homes. Does anyone know if this would be possible? My brother lives with mum after a marriage break up but has only been with her since April. Thanks

HappyMJ

carolann312 wrote: »

Hi

My mum has lived in her council house for over 50 years and has received a leaflet from her Council re Right To Buy. I should imagine she will get quite a large discount due to the time she has been a tenant (I could be wrong - don't know much about how this works) and the family were wondering if it would be possible to get a mortgage between us to buy the house for mum. There are 4 of us and 3 of us already have mortgages on our own homes. Does anyone know if this would be possible? My brother lives with mum after a marriage break up but has only been with her since April. Thanks

How much do they want for the property?

You might find it much easier extending your own mortgages and giving the money to your mother as a gift. However, if she needs to go into care then the property will be sold to pay for that and you lose your investment. Is it worth the risk? Will each of your partners agree to that? You could each take out personal loans in your own name rather than a joint debt and give to your mother...but not sure if the bank would agree with your reason.

leveller2911

carolann312 wrote: »

Hi

My mum has lived in her council house for over 50 years and has received a leaflet from her Council re Right To Buy.

Really?..........I always thought a tenant had to approach the council, never knew the councils were pro active in sending out flyers to tenants...

"crunch, crunch,crunch,crunch"................ Popcorn anyone?...

carolann312

Happy MJ don't know yet we haven't got that far. The maximum discount given is £77,900 and it is probably worth about £95k. I suppose getting a loan each might be another option - thanks.

carolann312

Yes Leveller2911 the leaflet arrived in the post with her rent statement!

Yorkie1

Your idea is probably a non-starter.

Mum would have to be on the mortgage. She can't be left off the ownership / mortgage documents.

Your brother needs to have lived there for, I think, 12 months before he can be a joint applicant for the RTB (and mortgage).

The rest of you, I think, couldn't be on the RTB mortgage as you're not entitled to it (check this bit out, though).

Onto the more practical parts - what would your Mum get out of it? At present she has a secure tenancy and with no responsibility for maintenance. In her situation she gains nothing by this plan.

ed67812

Yorkie1 wrote: »

Your idea is probably a non-starter.

Onto the more practical parts - what would your Mum get out of it? At present she has a secure tenancy and with no responsibility for maintenance. In her situation she gains nothing by this plan.

I'm guessing that your mother is obviously retired from the fact she couldn't get a mortgage for the 20k or so difference between value and discount and the fact that she has lived there for 50 years. Therefore what does she benefit?


If she lives another thirty years, then currently she has a secured tenancy, where she calls the council if the boiler breaks etc. If you own the house she has to call you every time. Will you borrow more on the loans etc. Whilst finding the 20k between 4 of you via personal loans would probably be easy, do not underestimate future maintenance costs. Would Mum feel cheated if you couldn't afford another repair to keep her warm / comfy when the council used to do it for free?

If she dies soon, then you the children might be left the house in a will (and so make a healthy profit) but you might not. Nothing is guaranteed. Likewise if your Mum needs care, the house could be sold for that.

When I see these sorts of posts, ignoring the emotion of right to buy and the ethics (not questioning yours) of children, one thing that always gets missed is the secure tenancy. The headline figures are the value of the house and discount, but forgotten is the less tangible value of the secure tenancy with below market rates, free repairs etc (particularly on older houses). When that is properly quantified, it becomes a very new scenario.

HappyMJ

And the rent is most probably covered in full by housing benefit so effectively free.

ed67812

HappyMJ wrote: »

And the rent is most probably covered in full by housing benefit so effectively free.

Massive point that I missed!

A_Frayed_Knot

I would certainly have a go at buying if it was my mum living in a council house. First of all there is 3 of you all into this so should work out low enough for a loan, all of you would then need to gift your mum the money so she could buy it in her name. Next would be for the brother living in the house - get him to agree (if he could not afford to get a loan) to maintain the house for repairs etc (this could be his contribution).
Then once your mum is passed the restriction period of not being able to sell without paying back the discount, get her to change the ownership to yourselves.



Why do some people assume that someone living on their own (which their mum is not) in a council house do not have a pension/funds to pay for their own rent and in any case the brother living there would put paid to any benefit given to the mum for rent if she was in receipt of any in the first place.

missbiggles1

HappyMJ wrote: »

And the rent is most probably covered in full by housing benefit so effectively free.

That's an enormous leap to make from the information provided!