RITB fist time buyer questions

snowboardalleycat

Hello

I find myself in a daunting position and am after any helpful advise.

I have rented my 2 bed flat from the local authority for the last 18 years. A family relative recently asked if I ever considered buying my flat to which I replied yes as it would probably work out cheaper than renting i was thing of looking into it. He then said look into it as I would like to gift you a lump sum. Wow.

So I applied and got excepted, they sent a valuer out and now I have the offer and this is the bit I very naive about and dont know what to do next.

When the valuer came round ,I made a list of all the things that I would need to replace or fix:-
New front door (non regulation)new radiator, new window, plaster walls etc you get the pic thinking this would come off the value but nowhere in the offer did this appear. Just a list of improvements that were disregarded in assessing the value. Tiles,floors and gardening.

Do I except it ? can i ask for these things to be fixed before excepting (mind you they take weeks to do and I have 12 weeks to except offer)

Also the value... The flat above same as mine but with loft and garden(just beyond mine) over twice the size sold last year for £124'000
My offer £122'000 I know market is slow around here is that a good offer?

Services charges are £372 per year
Itemised work for ref period 1/5/20 to 31/3/26 is a whooping £23'000
I am guessing (hoping)that you can pay this in installments if needed.

So now finances.
I have full discount so that brings my property down to £39'200
What else to I need to pay for and costs to secure ? Solicitor etc
Do I need a structure surveyor?Could I ask the vendor above and use their survey to save money? I know I do not need to pay stamp duty as below threshold. Anything else?

Would I need a different solicitor to draw up a will leaving the property to my 18 year old Son?

If I should die within the five years would my son have to pay back any discount to the council?

Now for Mortgage or Loan? Forgive me Im learning!

I dont know what any costs after the initial £39'200 will be at this point but £30k towards my property is on offer leaving £10k plus costs.

I do not have any savings but reading on MSE about a Help to buy ISA for first time buyer, I borrowed £2k from Virgin Money(£40 cost) and put £1.2k in followed by 2 more months £200 so this will give me £400 every little helps:)

Any help or ideas in this area would be appreciated.

I think thats it well for now ,thank you to anyone who read through all that apologises all going round in my head!

Any direction or help in any of these areas would be great.
Many tanks in advance.

Cakeguts

How are you going to pay the £23,000 repairs bill if you don't have any savings? What happens if you get another repair bill? The problem with council flats is that there are ofter huge repair bills that you don't pay if you don't own the flat.

[Deleted User]

snowboardalleycat wrote: »

Hello

I find myself in a daunting position and am after any helpful advise.

I have rented my 2 bed flat from the local authority for the last 18 years. A family relative recently asked if I ever considered buying my flat to which I replied yes as it would probably work out cheaper than renting i was thing of looking into it. He then said look into it as I would like to gift you a lump sum. Wow.

So I applied and got excepted, they sent a valuer out and now I have the offer and this is the bit I very naive about and dont know what to do next.

When the valuer came round ,I made a list of all the things that I would need to replace or fix:-
New front door (non regulation)new radiator, new window, plaster walls etc you get the pic thinking this would come off the value but nowhere in the offer did this appear. Just a list of improvements that were disregarded in assessing the value. Tiles,floors and gardening.

Do I except it ? can i ask for these things to be fixed before excepting (mind you they take weeks to do and I have 12 weeks to except offer)

Also the value... The flat above same as mine but with loft and garden(just beyond mine) over twice the size sold last year for £124'000
My offer £122'000 I know market is slow around here is that a good offer?

Services charges are £372 per year
Itemised work for ref period 1/5/20 to 31/3/26 is a whooping £23'000
I am guessing (hoping)that you can pay this in installments if needed.

So now finances.
I have full discount so that brings my property down to £39'200
What else to I need to pay for and costs to secure ? Solicitor etc
Do I need a structure surveyor?Could I ask the vendor above and use their survey to save money? I know I do not need to pay stamp duty as below threshold. Anything else?

Would I need a different solicitor to draw up a will leaving the property to my 18 year old Son?

If I should die within the five years would my son have to pay back any discount to the council?

Now for Mortgage or Loan? Forgive me Im learning!

I dont know what any costs after the initial £39'200 will be at this point but £30k towards my property is on offer leaving £10k plus costs.

I do not have any savings but reading on MSE about a Help to buy ISA for first time buyer, I borrowed £2k from Virgin Money(£40 cost) and put £1.2k in followed by 2 more months £200 so this will give me £400 every little helps:)

Any help or ideas in this area would be appreciated.

I think thats it well for now ,thank you to anyone who read through all that apologises all going round in my head!

Any direction or help in any of these areas would be great.
Many tanks in advance.

Will it really work out cheaper than renting with the £23k repair bill coming to the leaseholders in the near future?

I'm not sure what a non-regulation door is or why a new radiator is required. The items you have listed sound cosmetic and therefore won't have much to do with the value of the property.

If you want a survey carried out then get your own survey done. If you rely on your neighbour's survey, which is for a different property anyway, and something crops up further down the line you will have no come back.

If I understand correctly, the leasehold will cost you £39,200 to buy and as you have no savings other than some money in a HTB ISA so you will need a mortgage for the full amount using your discount as the deposit.

I'm not quite sure what you mean by the bit in bold. Is the £30k how much you want to spend on your property after you have bought it?

AdrianC

Lover_of_Lycra wrote: »

I'm not quite sure what you mean by the bit in bold. Is the £30k how much you want to spend on your property after you have bought it?

I think they mean that the kind relative is offering £30k.

OP - think very carefully about this.
You know you're going to be tapped for £23k in repairs between now and 2026. That's YOUR RESPONSIBILITY TO PAY. So that takes the effective purchase price, post-discount, to £63k.

If you can't pay your mortgage, your flat WILL be repossessed.
If you need residential care when you're old and ill, your flat WILL need to be sold to pay for it.
If there are other bills, they WILL be for you to pay.

Right now, you have a great deal more security than you will have once you are an owner.

diggingdude

Also that repair bill is likely to come in higher than the estimate

snowboardalleycat

Hi Thank you for your replies. Yes I am thinking very carefully about this .
I pay rent with maintenance £97 per week for 50 weeks per year.
If I were to purchase I would need a Loan/Mortgage for £10k plus any costs.
For the works I need to look more into this part and how can pay.

Cakeguts

snowboardalleycat wrote: »

Hi Thank you for your replies. Yes I am thinking very carefully about this .
I pay rent with maintenance £97 per week for 50 weeks per year.
If I were to purchase I would need a Loan/Mortgage for £10k plus any costs.
For the works I need to look more into this part and how can pay.

The problem you have with buying a council flat lease is that there tend to be very expensive repair bills. You have got an estimate of what it is going to cost until 2026 of £23,000 but it could actually be more and not only that but after 2026 they could bill you again for more repairs.



Buying this flat for you is a risk of you becoming homeless if you can't keep up the repayments on these bills. At the moment there is no chance of that because you have a secure tenancy.



It doesn't even look as if it is going to be cheaper to live there if you buy the lease so why do it? Don't do it because you think your son will inherit. If you own a property and you need care when you are older you have to sell the property to pay for it. If you can afford to pay £23,000 off in installments why don't you put these installments into a savings account and give it it to your son now? Then he will at least get something rather than it all being used to fund your care if you put it into your flat.



To get money out of a property you have to sell it. Some council flats are very difficult to sell because of the repair bill problem.

Simby

Or look at it this way

You would get a flat essentially worth 122k for a cost to you of 33k ( 10k you need to fund as you are receiving a gift of 30k) and the 23k of expenses.

You can keep it for 5 /10 years and sell for a large profit...

Or you can keep renting for the rest of your life.....

csgohan4

nothing could possibly go wrong

https://forums.moneysavingexpert.com/discussion/6003024/right-to-buy-flat-warning

https://forums.moneysavingexpert.com/discussion/5856039/service-charge-being-billed-for-5000-major-works

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

Simby

Reading the 3 links nothing went wrong in any of them

First one the guy made 157k profit if he chose to sell and had been happily earning rental income until then

The other ones were minor bills of 5k and 6k which payments could be spread...

Would not dent much the huge profit the op is likely to make if they buy it ...

Cakeguts

Simby wrote: »

Reading the 3 links nothing went wrong in any of them

First one the guy made 157k profit if he chose to sell and had been happily earning rental income until then

The other ones were minor bills of 5k and 6k which payments could be spread...

Would not dent much the huge profit the op is likely to make if they buy it ...

The first guy lived in London. Even with the profit that he could take from selling if he could sell it at all where would he live then? If he let it he would have to then rent somewhere else. The whole point of buying it was to stop renting.



If you are buying a flat from the council in order to live more cheaply or to stop renting you really do have to consider what you are going to do if you keep getting bills for the odd £23,000 or the odd £5,000 in the continuing years especially if you don't have any savings.