The Right to Buy Scheme... Sigh

Mr_Big

Ok, I'm not really looking forward to this as I've seen previous threads but I need help.


I feel the need to explain the situation so you understand my predicament, I'll try and cut it as short as I can. My mom got offered the right to buy scheme and decided to go for it as it would be cheaper than paying what she was at the time renting from the council. It was all fine for a year or two until her job lowered her hours due cut backs. She came to me stressing and asked if I could help with the mortgage due to her struggling. I agreed but advised her to get another job etc to get back on track with it as I was living at my ex's at the time and paying half to her mortgage which was crippling my wages. Fast forward roughly two years and we're still in the same predicament with me paying the mortgage. It wasn't a problem at first as I ended up living at home due to me and my ex breaking up so it just felt like rent but the issue I now have is I met someone else and she's now at the stage she wants us to move into our own place. Remembering how hard it was last time I asked my mom about it but she's not in a position to pay it at this time. Now, I have savings, enough to clear this mortgage, but this money was meant to be for my own mortgage or to set up my own business so it's not really money I want to spend but with current partner frustrated with our situation, I'm starting to feel backed into a corner. If I pay this mortgage off, I've told my mom I want it in my name as obviously that's my life savings down the drain and I no longer have a deposit for my own place which she is fine with.


Now the issue at hand, as you guys know... there's lots of stipulations in regards to this kind of thing. Firstly is the 5 year period in which the discount can be taken away, I believe this will be done by next year. The other issue is what I'm confused with, section 156A of the housing act which basically says for 10 years the house cannot be sold or amended without the government having the right of first refusal. So does this mean after the 5 year pay back period is done, if my mom wanted to put the mortgage in my name so I could pay it off, they can refuse that and take the house back off us? How does it work exactly? Also, a lot of people say the government generally don't buy the houses back even when you do offer them first refusal, but if they do decide to take the house back do you have a choice to just continue with how things are and pay the mortgage payments as normal? Or is it once they decide to take the house back it's just done from there?


Just want to say this isn't me trying to scam a house on the cheap, the situation isn't ideal for me but it seems like the only way to have my wage back and be able to rent with my current partner. I've already told my mom I probably won't sell the house but rather move in myself when I have a family as I've lived in that house all my life until recent. I unfortunately don't qualify as the family members though as it hasn't been a year between leaving my ex and meeting my current partners which I mainly stay at her moms now. Any help is appreciated, thanks

bob_bank_spanker

Do what you should have done a few years ago - let your Mum stand on her own two feet. The odd bit of help here and there is fine, but you cannot be reasonably expected to subsidise someone else's life to the detriment of your own.

That will of course mean the house will probably be sold, perhaps even the discount taken back. Not what you want to hear....

Lioness_Twinkletoes

I'll leave the legal issue for others but I am curious as to what Mum will do if you do decide to either sell the property or move in. Where is she going to live?

teddysmum

She could sell back to the council, then rent again.

Red-Squirrel_2

This thread should be made a sticky so that people can see the downside of RTB.

Lioness_Twinkletoes

teddysmum wrote: »

She could sell back to the council, then rent again.

Not a lot of councils do this scheme - especially if the house is too big for her needs.

Norman_Castle

Mr_Big wrote: »

Firstly is the 5 year period in which the discount can be taken away, I believe this will be done by next year. The other issue is what I'm confused with, section 156A of the housing act which basically says for 10 years the house cannot be sold or amended without the government having the right of first refusal. So does this mean after the 5 year pay back period is done, if my mom wanted to put the mortgage in my name so I could pay it off, they can refuse that and take the house back off us?

If the house is sold in under 5 years a percentage of the discount will need to be repaid. The percentage will be based on the amount of years since the house was purchased.

If the council have the right of first refusal and show interest in buying back the property your mother can decide not to sell. They cannot take the house off her.

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

"You may not have to pay back the discount if you transfer ownership of your home to a member of your family. You’ll need to agree this first with your landlord and then get a solicitor to do this for you."

Mr_Big

Norman_Castle wrote: »

If the house is sold in under 5 years a percentage of the discount will need to be repaid. The percentage will be based on the amount of years since the house was purchased.

If the council have the right of first refusal and show interest in buying back the property your mother can decide not to sell. They cannot take the house off her.

"You may not have to pay back the discount if you transfer ownership of your home to a member of your family. You’ll need to agree this first with your landlord and then get a solicitor to do this for you."

Thanks for the replies. Can I just ask, where it says it's possible it can be transferred over to a family member, is that just in general or is that rule where they have to have lived in the house being bought for at least a year? Also, if the 5 year point is met where they can no longer take the discount away, is it then possible for my mom to transfer it to me without any issues? Or will the council still get first right of refusal


Just to answer a few questions. As much as I'd like to just leave my mom to it, I can't see struggle, yeah it sucks the impact it's having on my life but I'm sure it was the same bringing me up. If I was to sell the house back and rent it would be more and it's me who's paying so I'll just have less money than before so don't really want to do that. I have no intentions of kicking her out, I'm happy to rent a place for myself and my partner once I've got my full wage back. Thanks guys

Pixie5740

You should probably take professional advice (both of you) before going ahead and transferring the equity.

An alternative you might want to consider is placing a charge against the property rather than owning it. This would protect you from potential Capital Gains Tax liability when the property is eventually sold and should you buy your own home in the future you wouldn't be liable for the higher rate of SDLT. There are other benefits such as protecting your money should your mum need care in the future and your mum can't be accused of deprivation of assets if she retains some equity.

Norman_Castle

Mr_Big wrote: »

Thanks for the replies. Can I just ask, where it says it's possible it can be transferred over to a family member, is that just in general or is that rule where they have to have lived in the house being bought for at least a year? Also, if the 5 year point is met where they can no longer take the discount away, is it then possible for my mom to transfer it to me without any issues? Or will the council still get first right of refusal

No idea about the specifics about the family transfer, ask the council informally as they will have to agree to the transfer.

The council will get first refusal if the property is sold within 10 years, again ask the council, they should be able to advise informally on the likelihood of them wanting to buy the property back. If they cannot answer so you are forced to offer it to them you can withdraw it from sale if you don't want to sell it to them.

sevenhills

Mr_Big wrote: »

As much as I'd like to just leave my mom to it, I can't see struggle, yeah it sucks the impact it's having on my life but I'm sure it was the same bringing me up. If I was to sell the house back and rent it would be more and it's me who's paying so I'll just have less money than before so don't really want to do that. I have no intentions of kicking her out, I'm happy to rent a place for myself and my partner once I've got my full wage back. Thanks guys

See if you can get a lodger to live with your mum, share the costs.