RTB (Right to Buy) questions - I'm not the tenant but live there and own a buy to let

Bananas_1

Hi all

Hope everyone well!

I have a few questions regarding RTB (Right to buy) rules. Before we seek legal advice I want to have as much information to hand as possible. Council hasn’t been very helpful thus far.

Me and my daughter aged 12 live with my mum who is the tenant in a 3 bedroom council flat (secure tenancy). We have lived with her for several years.  My mums tenancy started in 1998 and she’s always been the sole tenant.

Under the Right to Buy scheme we are considering purchasing 25% share of the property (our council offer this) and then hopefully in time purchase more share in the property. We’re unable to get a mortgage as we’ve been told by several banks that because the flat is on a high level they won’t mortgage it. I also own a buy to let property far away from where we live. This has been my permanent home for me and my daughter and can obviously prove this plus my daughter is in school in this area.

Will I be permitted to be on the application for the RTB if I own a buy to let?

My concern is that if we do this and my mum passes away would the council force me and my daughter to leave as we would have a spare bedroom?  Would I have more rights as I would own a share in the property? Could the council force me to sell our 25% share of the property?

Will the council accept us purchasing 25% share with savings and no mortgage?

Thanks as ever for your help!

propertyrental

Bananas_1 said:

Hi all

.......

Under the Right to Buy scheme we are considering purchasing 25% share of the property (our council offer this) and then hopefully in time purchase more share in the property. We’re unable to get a mortgage as we’ve been told by several banks that because the flat is on a high level they won’t mortgage it. ....

2 reasons there why I'd forget the idea.

theartfullodger

You are legally entitled to give mum the money to buy it .

You are legally entitled to sell your BTL to fund it (CGT will be due).

She is legally entitled to change her will anytime and leave everything to whoever or whatever rather than you (eg Battersea dogs home).

Best wishes to all 

sheramber

Why would you buy a flat that no one can get a mortgage for? 

You would have problems if you wanted to sell it.

How will you pay for any maintenance costs that arise if you have no savings?

Presumably you are not on the tenancy. 

You need to check your council’s rules for share ownership/right to buy when not a tenant to see if you can be a joint owner with out being a tenant. 

Bananas_1

sheramber said:

Why would you buy a flat that no one can get a mortgage for? 

You would have problems if you wanted to sell it.

How will you pay for any maintenance costs that arise if you have no savings?

Presumably you are not on the tenancy. 

You need to check your council’s rules for share ownership/right to buy when not a tenant to see if you can be a joint owner with out being a tenant. 

 Thank you for your reply.

 We were advised not entirely impossible as it's desk access just that we'd have limited lenders and the rate would be higher than the norm.

We would still have money aside for anything major like a boiler needing to be replaced etc. 

You can go on the application for the purchase as long as you've lived with the tenant for 12 months, I've been here since 1998 except for a small gap when married and returned after my divorce. You don't need to be on the tenancy.

Bananas_1

theartfullodger said:

You are legally entitled to give mum the money to buy it .

You are legally entitled to sell your BTL to fund it (CGT will be due).

She is legally entitled to change her will anytime and leave everything to whoever or whatever rather than you (eg Battersea dogs home).

Best wishes to all 

Thank you for your reply. That's a very good option!

Appreciate my mum could do that so would be better for me and my daughter if I could purchase it with my mum.  

Bananas_1

propertyrental said:

Bananas_1 said:

Hi all

.......

Under the Right to Buy scheme we are considering purchasing 25% share of the property (our council offer this) and then hopefully in time purchase more share in the property. We’re unable to get a mortgage as we’ve been told by several banks that because the flat is on a high level they won’t mortgage it. ....

2 reasons there why I'd forget the idea.

Thank you for your reply.  Totally get your point.  There's several personal reasons why I'm looking at this option. If I could afford it I would just purchase a small flat nearby and not even go down this route but my daughter has been through enough.

Jude57

Just to point out that a new boiler in the flat is the least of your concerns as far as maintenance is concerned. What about block maintenance such as a new roof? New windows for the Council owned flats which leaseholders also are compelled to have to ensure safety and to ensure a uniform external appearance for the block? Lift maintenance? New doors for each flat to comply with fire safety regulations and again, must be installed by leaseholders as well? I live in a Council owned block and we are currently having new windows and air source heat pumps installed to provide heating and hot water, so that the gas supply to the block will be removed, as will the existing gas boilers - leaseholders are having these installed, too, but at no charge because the funding is from a European grant. As a leaseholder you will be liable to contribute to those sorts of costs so before going ahead, it would be wise to find out what capital works have been done in the last, say, five years and what capital works are planned for the next five years.

Could you not become a joint tenant with your mother, so that if anything happens to her, you can succeed to the tenancy and you and your daughter would have some security? I don't know if that's possible as you own another property, though.

Bananas_1

Jude57 said:

Just to point out that a new boiler in the flat is the least of your concerns as far as maintenance is concerned. What about block maintenance such as a new roof? New windows for the Council owned flats which leaseholders also are compelled to have to ensure safety and to ensure a uniform external appearance for the block? Lift maintenance? New doors for each flat to comply with fire safety regulations and again, must be installed by leaseholders as well? I live in a Council owned block and we are currently having new windows and air source heat pumps installed to provide heating and hot water, so that the gas supply to the block will be removed, as will the existing gas boilers - leaseholders are having these installed, too, but at no charge because the funding is from a European grant. As a leaseholder you will be liable to contribute to those sorts of costs so before going ahead, it would be wise to find out what capital works have been done in the last, say, five years and what capital works are planned for the next five years.

Could you not become a joint tenant with your mother, so that if anything happens to her, you can succeed to the tenancy and you and your daughter would have some security? I don't know if that's possible as you own another property, though.

Thanks for highlighting all these eventualities, I really appreciate it. I guess we would be faced with the same if I purchased any flat. No major works are planned for the next 5 years but I know that doesn't mean anything.

I believe the law was changed some years ago where children of a tenant couldn't be added to a tenancy only a partner of the tenant. As my mums tenancy is with the council and a secure one from 1998 I could potentially succeed the tenancy but would not be permitted to stay here. 

I have to really weigh up the risks financially to ensure some security for us. 

theartfullodger

Bananas_1 said:

theartfullodger said:

You are legally entitled to give mum the money to buy it .

You are legally entitled to sell your BTL to fund it (CGT will be due).

She is legally entitled to change her will anytime and leave everything to whoever or whatever rather than you (eg Battersea dogs home).

Best wishes to all 

Thank you for your reply. That's a very good option!

Appreciate my mum could do that so would be better for me and my daughter if I could purchase it with my mum.  

IANAL but afaik .....

 Fair enough.  You have absolutely no right to buy under RTB - as I'm sure you know.

Mum can buy it, then you can buy it from her - but only if she wants to sell it to you (rather than anyone else ). IIRC there are restrictions on when that can happen and/or claw back.


HMRC will assume the price was market price, not what was actually paid.

Bookworm105

Bananas_1 said:

We would still have money aside for anything major like a boiler needing to be replaced etc. 

do you realise that as (part0 owner of a flat in a tower block you will be liable for repairs outside the flat itself?
if the block needs redecorating you will be charged a share of the bill
if the roof needs replacing you will be charged a share of the bill

Your share will make the cost of a boiler look like the cost of the weekly shop in comparison to the £ tens of thousands you might be charged. 
You may see RTB as a means of getting an inheritance, but when applied to a flat in a block, that inheritance can vanish in debts owed to the council.

have you established how much service charge you'll have to pay each quarter?