Right to Buy to Permitted Developments to Defaults and everything in between!

elaine77_04

Apologies for the long thread but I have a complex situation and so not quite sure which end to start at regarding which professionals to speak to! I’m not sure how best to explain it either but here goes...

Basically, there are three aspects to my dilemma and I’m not sure how they all affect each other and the best way to deal with them holistically.

1. I have the opportunity to purchase my home that I have lived in for over 10 years and will get a Right to Buy discount of 42% if I do this; I have submitted the RTB1 form and am awaiting an offer. My family are poor and so are my Husband’s and so we don’t have any inheritance ever coming to us and we can’t get help from any family members financially and so everything we have or ever will have will be of our own making.

2. We only want to buy our house if we can extend it with a rear extension and loft conversion as parts of the house will be too small once our children reach their teens and we need a bit more space. We have spoken to architects and builders and we don’t foresee any issues with getting a rear extension and a loft conversion (other than the cost of course) and so, ideally, we want to use the ‘discount’ we get to fund the extension but we also need the discount to act as our deposit as we don’t have sufficient savings and can’t rely on family to help, or an inheritance.

3. The problem however, is that until very recently I worked for Local Government and in 2017 I was faced with either being made redundant or taking a different role within the Council but for a much lower salary. Obviously any employment is better than no employment and so I took the lower paid role. Unfortunately though this meant that I had to default on my two highest credit accounts (both with Barclays who I banked with at the time and had banked with for 20 years prior and still have an account with but don’t use).

After having had an amazing credit rating my whole life I now have two recent defaults with my old bank, however, I also have two other credit cards; gas and electric; tv/broadband and mobile phone credit accounts which are all completely up to date and have been running for a long time without even so much as a late payment. I also have a new job in the NHS which is hopefully a lot more secure and also a lot higher in salary - also any mortgage would be in my name alone on my income alone as we don’t want to mortgage ourselves to the hilt in case anything ever goes wrong in future again like in 2017.

I guess my questions are therefore the following;

- should I continue with the RTB or will I have to take a really bad deal due to the recent defaults on my credit rating?

- do I have any chance of using the discount to take on top of the mortgage to carry out the extension work or will they refuse this outright because of the defaults and the fact that the only chance I might have of getting a mortgage will be their guaranteed 42% instant equity?

- if I can’t take the money on top should I still take the RTB and then remortgage to release the equity to carry out the improvements once the defaults fall off and I can get a good deal?

- do I have a better chance of success with Barclays for the mortgage because the only debts I have are with them? (They were really kind about the issues as they could see my wage change as I’d banked with them forever and so they issued the defaults immediately and didn’t chase me for any money or anything as they could see the change in my wages themselves as I banked with them at the time).

- do I have a better chance of getting a mortgage with my current bank (LLoyds) as they can see my wages and how healthy my bank account is now and has been for the past 2 years since I began banking with them (and could use Barclays as a bargaining chip maybe)?

- should I just scrap the whole RTB and wait until the defaults drop off in 6 years time (not really the best course of action for us as a family as my eldest will be 17 by then and her teen years wasted in a too-small council house).

I should add that I have been offered settlements on the 2 debts but financial advice I have taken is that partially settled accounts won’t help my credit rating one jot (and might make it worse) and so I’d be better not paying to settle the debts.

Any advice would be very gratefully received!

:j

Cakeguts

You say that you and your husband are poor and that you have already had a financial problem. So what you want to do is to give up your whole life's housing security to take up the risk of owning your home. As a council tenant you will never have to worry about housing and if you need care in your old age the council will provide it for you.


People who own houses have to sell them to pay for nursing care if they need it. So don't do this thinking that you will leave an inheritance for your children because there is a good chance that you won't.



If you get into financial problems with a mortgage especially if you are thinking of borrowing more to pay for an extension there are no benefits to help you pay the mortgage. The most that you will get is help towards the mortgage interest but not the mortgage so if you get into financial problems buying this house you will have to sell it of the bank could repossess it. If this happens you will not be rehoused by the council.


You need to think very hard about giving up a secure council tenancy they are very difficult to get because once you get one the council will house you for life. People who own houses do not have this security.

HampshireH

It sounds like house buying and thw subsequent plans are not affordable to you.

Have you obtained quotes for the extension and loft conversion? They aren't cheap.

The most affordable option to you would to seek alternative social housing. You should be eligible to reregister with 2 mixed teens sharing a room.

You usually take your RTb providing you stay with the council and the property allows it. (New builds for example are unlikely) RTB Is a personal benefit not a property one.

This was you have a appropriate size house, the security& an option later down the line should your circs change

elaine77_04

Sorry but I didn’t say we were poor at all; I said our families are poor, which they are. We have good jobs and I earn a very good salary and, as mentioned in detail, an unexpected occurrence happened in 2017 which we are mitigating by only mortgaging on one income.

I have seen a few of your posts on here and you come across as someone who is just very against the Right to Buy in general. You are perfectly entitled to this stance, of course, however it’s important you bear in mind that if it wasn’t for RTB many people who come from poor backgrounds would not ever be able to get on to the housing ladder no matter how hard they worked because modern society does not foster the ability for many people to “save” enough for the deposits required for mortgages and their parents do not have the ability to “help them out” with cash, inheritance, or rent-free living to save.

I appreciate your time in responding, however, the vast majority of people in this country are just a few pay checks away from zero money and so by taking your approach to “security” no one would ever buy a house unless they were completely mortgage-free.

elaine77_04

I have obtained quotes for the extension and the conversion and the mortgage and it is perfectly affordable to me as I earn a very good salary and this would not even include my Husband’s salary as we are being cautious and not over-mortgaging (as explained). Finance is not an issue here, it is the effect of the defaults from a very minor blip and where and how to get the best deal and make the best decisions.

Cakeguts

elaine77_04 wrote: »

Sorry but I didn’t say we were poor at all; I said our families are poor, which they are. We have good jobs and I earn a very good salary and, as mentioned in detail, an unexpected occurrence happened in 2017 which we are mitigating by only mortgaging on one income.

I have seen a few of your posts on here and you come across as someone who is just very against the Right to Buy in general. You are perfectly entitled to this stance, of course, however it’s important you bear in mind that if it wasn’t for RTB many people who come from poor backgrounds would not ever be able to get on to the housing ladder no matter how hard they worked because modern society does not foster the ability for many people to “save” enough for the deposits required for mortgages and their parents do not have the ability to “help them out” with cash, inheritance, or rent-free living to save.

I appreciate your time in responding, however, the vast majority of people in this country are just a few pay checks away from zero money and so by taking your approach to “security” no one would ever buy a house unless they were completely mortgage-free.

Most people who buy houses for the first time live in private rented accommodation. They don't have the security of a secure council tenancy.



It is unusual for someone with a good salary to ask advice about Right to Buy because most people who can afford it buy on the open market because they can often get a house where the size suits them better. The risk with extension is that the council will refuse planning permission.



The reason why people come over as being against Right to Buy on here is because they know that there is a shortage of social housing for people who don't have good salaries and who can't afford to buy and who are at present living in temporary accommodation or are privately renting.



The social housing was available to you when you needed it but you are quite happy to remove it from your local council's social housing stock making it unavailable to someone else who is in the position that you used to be in even though you could afford to buy on the open market and it isn't big enough for you.



Somewhere in your local area there is a family living in temporary accommodation waiting for a council house and you are going to make sure that there is one less available even though you could afford to buy a normal house in the normal way.

elaine77_04

I used to work for the Council and I have spoken to ex-colleagues and they see no issues with planning for what we are looking to do. They also have massively encouraged me to make the most of the RTB as we have paid full rent and invested a lot of time and money for a lot of years into our home.

I appreciate the sentiment you hold, however, we have built a home here and there are no “new build” estates where we live that we can afford to buy in and, as mentioned, we have good salaries but we don’t have enough savings to cover the deposit we would need to get a house of equal size in a location that is close to where we have built our life. I think these are valid points you should take on board. We can afford a mortgage on the open market but we can’t afford the deposit that would be required for it and so we couldn’t buy on the open market.

I also think it’s important to point out that the Council’s failure to build more social housing and to allow private developers to profit from private developments instead is not the fault of hard working people who are just trying to get themselves on the housing ladder.

I’m also interested to know....if you don’t think people on ‘good salaries’ should benefit from RTB then what kinds of people do you think should be benefitting from it? Without a decent salary how would you get any mortgage at all?

babyblade41

I think you should think again as you have not managed to save for a deposit with 2 good salaries whilst living in social housing, also with 2 defaults your money management isn't great either

Try looking outside your area, doesn't have to be miles away and see if something larger comes into your price range that requires no extensions,

Your good salaries should make this a far better option both in the short and long term

anselld

Have the defaults been settled? This will greatly improve your mortgage chances.

If you are serious you should talk to a mortgage advisor about your specific circumstances.

seven-day-weekend

I do not think it helpful to discuss the ethics of RTB on this thread. Whether or not some people think it should be the case, the OP does have the RIGHT to buy, under law, and is enquiring about exercising that right.

I think we should just answer the questions without going into the ethics. However, I personally do not know most of the answers.

I can say that they should not normally need planning permission for a loft conversion, as long as they do not have a dormer on the front. The exceptions would be if the property is a listed building, or in a conservation area, or had Permitted Development rights removed.

As for a rear extension, that too could come under Permitted Development, depending upon the size.

See the following Guide to Permitted Development and have a word with your local Planning Office:


https://ecab.planningportal.co.uk/uploads/miniguides/extensions/extensions.pdf

Hope this helps.

Norman_Castle

elaine77_04 wrote: »

I have obtained quotes for the extension and the conversion and the mortgage and it is perfectly affordable to me as I earn a very good salary.

The next step is to ask lenders what they will lend to you.


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