Right to buy valuation?

Mrmoo232

Hi,
Please forgive me if this is in the wrong section.

I have been living in a council house for the past 3 years and within the next couple of years or so I will be looking at buying the property through the right to buy scheme but I'm not quite sure how they value the house.
At the moment the house is in average condition in terms of decoration - it's liveable but does need a hell of a lot of work, ie new kitchen, bathroom and the garden needs a complete overhaul.
If I carry out this work before buying the property, is it going to add value to the house thus costing me more to buy it when the time is right? Should I push to buy the house before doing any serious work or will the value of the property be fixed dependant on other factors regardless of the work I carry out.

Any input will be very much appreciated.
Thanks.

da_rule

It's an open market valuation but tenants improvements are disregarded.

The Council can recover any costs they have spent on the property in the 10 year period before you serve your RTB notice if these costs exceed £5,500. The amount over the £5,500 will be deducted from your discount.

Your discount may also be reduced if the property has been purchased/built by the Council in the last 15 years.

csgohan4

Ensure you research the pros and cons of buying from the council, leasehold and freehold charges, service charges etc.




As this one poster found, the grass is not always greener at the tax payers expense


https://forums.moneysavingexpert.com/discussion/5789909/new-roof

Norman_Castle

da_rule wrote: »

The Council can recover any costs they have spent on the property in the 10 year period before you serve your RTB notice if these costs exceed £5,500. The amount over the £5,500 will be deducted from your discount.

Thats incorrect.
The cost floor rule prevents the property being sold for less than has been spent on it in the last 10 years.

I believe the first £5500 is disregarded but there is no mention of this via the link.

Link

Page 8

Reduction of discount to take account of the cost of work carried out by your
landlord on your home (cost floor)
Your discount may be reduced by a special rule called the cost floor. This may apply if
your home has recently been purchased or built by your landlord or he has spent money
on repairing or maintaining it. Under the cost floor, the discount you receive must not
reduce the price you pay below what has been spent on building, buying, repairing or
maintaining it.
If the cost of works carried out over the 10 year period is greater than the market value of
your home, you will not receive any discount. This period is 15 years if your home was
built or acquired by your landlord after 2 April 2012.


Possibly a better explanation. Page 28 and 29.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwjs48PpyM7aAhWBLFAKHUaVDaMQFghGMAI&url=https%3A%2F%2Frighttobuy.gov.uk%2Fwp-content%2Fuploads%2F2014%2F03%2F141019-RTB-toolkit-as-amended-October-2014.pdf&usg=AOvVaw0FXqEcTwPscOnJ8XbA2OfX

Cakeguts

Might be a good idea to check if it is available to buy under right to buy before going any further. Some of them aren't.

Who do you pay your rent to? The council or a housing association?

Norman_Castle

At the moment the house is in average condition in terms of decoration - it's liveable but does need a hell of a lot of work, ie new kitchen, bathroom and the garden needs a complete overhaul.

The valuation should ask about improvements you've made and disregard any increase in value.
You may need the landlords permission to replace the kitchen and bathroom.

da_rule

Yes Norman Castle, I should have better caveated my response by saying that the discount would be reduced where the costs of works is higher than the sale price (after discount). This could arise where the Council has done major works, such as entire refurbs or a new roof etc.

A new guide has been released this month (https://righttobuy.gov.uk/wp-content/uploads/2014/03/RTB-guide-for-local-authorities-April-2018.pdf) and pages 26-28 provide more information on the cost floor and some sample calculations.

As the op has said 'Council house' I'll assume it's not a flat, as such, the Op will be entitled to a 35% discount after 3 years and then from year 6 onwards an extra 1% up to the cap amount (70% or the financial cap which is currently £80,900 but does go up every year).

Cakeguts

If the OP has only been there 3 years the house could quite easily belong to a housing association and not the council anymore in which case they won't have the right to buy.