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Council Right to Buy
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ocee12
Posts: 9 Forumite
Hello Folks,
I would like to pick your brains please.
We have just been offered our flat under the CRTB scheme.
The market price the council have given is £90'660
with our discount its £52'660.
Bargain
Right this is where you folks could advise.
What we want to do is ... Raise as much money as we can via the equity to put a deposit down on another property in the Rep of Ireland.
Our daughter and partner will move into our flat and service the mortgage with the aim of (in five years time(the minimum amount of time we have to keep the flat so no discounts will be clawed back)) we can A: Sell the flat and go 50/50 on any profit or B: they buy us out.
Do we go for the full £90'660 mortgage hence giving us £38'000 cash or get this extra £38'000 via a loan on the equity on the flat.
Any advice will be greatly appreciated
Regards
Kevin
I would like to pick your brains please.
We have just been offered our flat under the CRTB scheme.
The market price the council have given is £90'660
with our discount its £52'660.
Bargain
Right this is where you folks could advise.
What we want to do is ... Raise as much money as we can via the equity to put a deposit down on another property in the Rep of Ireland.
Our daughter and partner will move into our flat and service the mortgage with the aim of (in five years time(the minimum amount of time we have to keep the flat so no discounts will be clawed back)) we can A: Sell the flat and go 50/50 on any profit or B: they buy us out.
Do we go for the full £90'660 mortgage hence giving us £38'000 cash or get this extra £38'000 via a loan on the equity on the flat.
Any advice will be greatly appreciated
Regards
Kevin
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Comments
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You're brave asking that on here - from previous threads I've seen about RTB you are most likely to just get a load of abuse - which I do not agree with. These forums are not what they were....
Unfortunately I can't advise you which is the best route for you to go down either. I don't think you are likely to get a mortgage for the £90k though, as it will be based on the price you are buying at.Live your life until love is found, or love's gonna get you down" (credit to Mika!)
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I do not agree with the abuse either, as you are only taking advantage of a legal right. However I don't think you will be able to borrow that amount (£90k+).. Usually mortgages are not granted for more than £100% of the purchase price. I know RTB mortgages can be a bit different though.
Are you going to live in the Republic of Ireland and your daughter and partner in the RTB?
I don't think they will be allowed to live there under the terms of the RTB scheme until the tie-in period is up, one of the conditions of RTB is that the person who has that right continues to live there until the tie-in is over (or at least it used to be a condition, presume it still is).
Looks like you may have to put your plans on hold for a few years.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
What sanctions do councils have against such violations of the terms of the RTB contract?Been away for a while.0
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I thknk the person can be made to pay back the discount they have been given.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
I typed a huge reply to this on Friday and lost it when the forums went down... probably just as well as I feel very strongly about this so you've all been saved the embarrassment of watching a grown woman ranting in public.
Anyway - whilst ever they have a charge against the property, the council will have to give the ok to any additional borrowing against the house. AFAIK they only approve home improvement loans - capital raising to buy a second home would be frowned upon.
And sub-letting whilst you go living it up at the expense of the tax payer (because that's who is subsidising your rtb) to avoid repaying the claw-back isn't really entering into the spirit of the thing, is it?
If you can afford a mortgage go and buy or rent in the private sector. Leave the council house for someone who REALLY needs it. I'm sure there are plenty of families and vulnerable people living in B&Bs who would be very grateful.
ETA: And before I get a raft of abuse blaming 'the system' rather than the OP, I'd like to point out that with rights come responsibilities and just because you can it doesn't mean you should.↑ Things I wouldn't say to your face
↖Not my real name0 -
Absolute classic.
The OP is trying to buy a second home by effectively using taxpayers money as a deposit.
I've really missed this place.dolce vita's stock reply templates
#1. The people that run these "sell your house and rent back" companies are generally lying thieves and are best avoided
#2. This time next year house prices in general will be lower than they are now
#3. Cheap houses are a good thing not a bad thing0 -
Curv wrote:Anyway - whilst ever they have a charge against the property, the council will have to give the ok to any additional borrowing against the house. AFAIK they only approve home improvement loans - capital raising to buy a second home would be frowned upon.
Politics aside, this is the key point. The council won't let you take the equity out. Method in their madness.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
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RTB should be scrapped entirely. It was a scam by the tories to buy votes and push up house prices.
Social housing is essential in any society to hold down rents.Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.0
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