Releasing Equity - Right to Acquire

[Deleted User]

I purchased my housing association home 18 months ago for £70,000. I received a £9000 discount through Right to Acquire (Not to be confused with Right to Buy) - In this period I cannot sell the house within 5 years - Which I do not intend to do!

The pre-exemption period states that I have to pay all or part of the discount back if I sell within 5 years.

• 100% of the discount in first year (£9000)
•  80% of the discount in second year (£7200)
• 60% of the discount in third year (£5400)
• 40% of the discount in fourth year (£3600)
• 20% of the discount in fifth year (£1800)

My deposit for the property was £45,000 which I received through inheritance and I mortgaged the remaining £25,000. I have paid a further £5,000 on the house in the last 18 months, so my total equity in the house is around £50,000. The house is worth around £79,000

I want to release around £40,000 of the equity that I have in the house to go towards purchasing another property for my son to live in on a residential mortgage. I earn 20K a year and the 40k deposit is what I need to purchase the property he needs to live independently.

My 24 year old son was a passenger in a major car accident 14 months ago and no longer has use of his legs, he lost his house and his whole life has fell apart since. He can manage independently at ground level and wants his own place again. My house cannot be adapted due to the size (Mid terraced). A stair lift cannot be fitted and we are unable to have an extension due to the house being on a steep upward hill. We were assessed for a downstairs bathroom but this was not possible due to the elevation of the house we live in so he is having to use a commode for the foreseeable future which is not pleasant for him. We only have one living room and a kitchen/diner so the situation is far from ideal in the long term.

My son was offered a place 45minuites away from us however we need him to be closer to us so we can support him, for example do his shopping and drive him to appointments, he is also planning to set up a business and want to go to the local university so we need to be close to help him with transport. We are lucky to live in a rural part of a village where there are only two rows of 4 houses down a country lane, our nearest town is 10 minutes away and we want to purchase a bungalow or ground floor flat for him there so he can be close. I really hope we can work something out for him.

As the pre-exemption is only for 9K of the property, am I able to release the remaining equity I have in the house to raise the £40,000 I need? Has anyone done this? I have found lots of information on Right to Buy but none on Right to Acquire. They are totally different schemes. I should note, the property will solely be for my son and we will not be charging any kind of rent before anyone asks. We want to do the right thing and have found ourselves in this situation through no fault of ours or our sons.

I really appreciate any help or advice anyone can offer. Thank You

MattMattMattUK

Are you planning on re-mortgaging, or using an equity release plan? If you are using equity release and then buying another property you will be will probably have problems with taking out a mortgage on a second property that you will not live in and you will also be throwing away any equity that you could build up in the property, money which will go to the equity release company, rather than to your son.

As your son was in an accident and was a passenger is he not entitled to a fairly significant amount of compensation? One would expect that to be on the order of several hundred thousand, money which could perhaps be used to secure a property?

baza52

im confused? you said your son lives in a HA property back in August and he wanted to buy it to release equity.
https://forums.moneysavingexpert.com/discussion/6183426/refusing-right-to-aquire-discount/p1