Right to buy mortgage

sirtaylor1984 · 7 October 2020 at 9:11PM

Myself and my wife are currently in the process of purchasing our council house from the council and we have been wanting to get our loft converted.

My question is, with us getting a mortgage to purchase the house is there a way or can we get the cost of the loft conversion added to our mortgage at all? Would we need proof or anything to back up the cost?

strawb_shortcake · 7 October 2020 at 9:19PM

The council don't usually allow this, despite the hefty discount their charge takes priority. Should the house prices fall the council needs to ensure they'll get their money back in the event the house is sold within 5 years.

sirtaylor1984 · 7 October 2020 at 9:38PM

So we wouldn't be able to get the loft conversion added to the mortgage and would have to look at alternative ways to pay for the conversion ourselves be it by loan or alternative financing?

strawb_shortcake · 7 October 2020 at 9:48PM

sirtaylor1984 said:

So we wouldn't be able to get the loft conversion added to the mortgage and would have to look at alternative ways to pay for the conversion ourselves be it by loan or alternative financing?

Yes. You would also have to get the councils permission whilst they still have a stake in the property.

csgohan4 · 8 October 2020 at 9:23AM

lenders only lend on what the property is worth now, they don't provide addition funding for renovations no matter how significant. Gone are the days when 125% mortgages were approved, it is due to tighter lending regulations and for good reason

Cscott139 · 8 October 2020 at 1:50PM

Some lenders will allow extra borrowing for home improvements on right to buy. Obviously you will need to pass affordability & credit checks etc. Speak to a broker.

hippocrates1 · 8 October 2020 at 2:31PM

Pretty sure it’s part of the rules of right to buy that you can’t make any cubes to the property so you wouldn’t be able to to do a loft conversion anyway.

Cscott139 · 8 October 2020 at 4:29PM

You are able to carry out home improvements as once you buy it you own it. The main things you need to be aware of are if you want to sell it. If within 5 years you will have to repay a % of the discount you received and this will be based on the value of the house at the time you sell so if you have dramatically increased the value then you may have to pay back more. If it is a leasehold property you will probably need to get permission for the works from whoever owns the lease.