Right to Buy - Purchasing parents council home ?

Xxadele92xx

Hi everyone, looking for some advice/experience on anyone who has gone through a right to buy scheme.

I have been back living with my parents after a divorce for 2 years now. My parents have lived in their council property for 20 years and have been council tenants for around 40 years (so they may be entitled to the full RTB discount). My mother and father are both in their early 70’s. They never purchased their home and are still paying rent to the council. 

I already have a buy to let mortgage which I currently break even on so I already own a property.

My parents are both retired. Would I be able to buy their home through RTB with myself and father on the application ? Would I get accepted through the bank as I already own a buy to let (this has a mortgage on), and my dad is retired. May I add I am in my late 20’s. 

I could sell my buy to let and raise enough capital to purchase my parents house outright with cash if that is another way around it (if I couldn’t go on the RTB scheme). Couldn’t I technically gift my parents the money and they purchase their home?

thank you in advance.
P.S. This is so they no longer have to pay the council rent, and we can all live there paying household bills only.

sync94

Prepare for some harsh comments from some users.

I doubt you will be able to get a mortgage with your father (he will have to be on the mortgage as he is on the RTB form) due to his age. So you will need to be a cash buyer.

HampshireH

Xxadele92xx said:

Hi everyone, looking for some advice/experience on anyone who has gone through a right to buy scheme.

I have been back living with my parents after a divorce for 2 years now. My parents have lived in their council property for 20 years and have been council tenants for around 40 years (so they may be entitled to the full RTB discount). My mother and father are both in their early 70’s. They never purchased their home and are still paying rent to the council. 

I already have a buy to let mortgage which I currently break even on so I already own a property.

My parents are both retired. Would I be able to buy their home through RTB with myself and father on the application ? Would I get accepted through the bank as I already own a buy to let (this has a mortgage on), and my dad is retired. May I add I am in my late 20’s. 

I could sell my buy to let and raise enough capital to purchase my parents house outright with cash if that is another way around it (if I couldn’t go on the RTB scheme). Couldn’t I technically gift my parents the money and they purchase their home?

thank you in advance.
P.S. This is so they no longer have to pay the council rent, and we can all live there paying household bills only.

So they would give up their security of a council house.

Your late 20s what happens when you need the money or find a partner. Will you ask them to pay your mortgage if you move out? Because someone will have to pay it.

I'm not really sure what they gain from this arrangement, except full liability, repair responsibilities, insurance costs etc.

But i can see what you would gain. A cheap property with a significant resale value later down the line

However if you sell your btl and "gift" them the money and they go into care then the house will need to be sold to pay for the care fees. So that money will be gone and you could be left sith no home and no money.

[Deleted User]

Xxadele92xx said:

Hi everyone, looking for some advice/experience on anyone who has gone through a right to buy scheme.

I have been back living with my parents after a divorce for 2 years now. My parents have lived in their council property for 20 years and have been council tenants for around 40 years (so they may be entitled to the full RTB discount). My mother and father are both in their early 70’s. They never purchased their home and are still paying rent to the council. 

I already have a buy to let mortgage which I currently break even on so I already own a property.

My parents are both retired. Would I be able to buy their home through RTB with myself and father on the application ? Would I get accepted through the bank as I already own a buy to let (this has a mortgage on), and my dad is retired. May I add I am in my late 20’s. 

I could sell my buy to let and raise enough capital to purchase my parents house outright with cash if that is another way around it (if I couldn’t go on the RTB scheme). Couldn’t I technically gift my parents the money and they purchase their home?

thank you in advance.
P.S. This is so they no longer have to pay the council rent, and we can all live there paying household bills only.

As you have been living with your parents for the past 12 months you can make a joint RTB application with at least one of your parents.  As it is you parents who have the RTB at least one of them would need to be on the mortgage with you which could be problematic due to your dad's age.  The BTL mortgage would not necessarily be a barrier should the BTL property be at least wiping its own face but it could meaning having to pay the higher rate of SDLT on the RTB purchase.  If the plan isn't for your mum to be on the mortgage then she should take her own legal advice as she would be giving up a secure council tenancy in return for nothing.

If you sell your BTL to fund the RTB then you could potentially be looking at a CGT bill.

Some other things to consider are the likelihood of you wanting to move out of your parent's home.  Any further property purchases will attract the higher rate of SDLT and having this RTB mortgage could impact affordability on further mortgages.  Should your parents/father require care in the future then their share of the equity can be used to fund that.  Not necessarily a bad thing as that could give your parents/father more options when choosing residential care.

FtbDreaming

I’m going through the process now and I’m pretty sure you wouldn’t be able to participate in the rtb as you already have a property. 

[Deleted User]

FtbDreaming said:

I’m going through the process now and I’m pretty sure you wouldn’t be able to participate in the rtb as you already have a property. 

I think as long as the tenant, the one with the right to buy, doesn't own any other property then it is possible.  The OP, or more specifically the tenants, should check with one of the RTB advisers.

In fact the RTB application says: "You can only claim the Right to Buy if the property is your ‘only or main home’. If you are applying to buy jointly with other tenants, only one of you needs to live in the property as your ‘only or main home’."