Right To Buy Advice

nightwarbler101

Hi all,

I'm new to the forum so apols if there is a similar thread elsewhere. I am looking to buy my flat via RTB, I am the sole tenant and have been here for about 45 years. In a sense the flat would be being bought for me by the father of my children, who is an EU citizen and currently working in the EU. It is first and foremost a way of securing a very much-loved family home, although we are looking at it partly as an investment for our children, one of whom wants to come and study here in the UK next year, and possibly the younger one in a few year's time. My question is whether we would need to use a UK bank or whether a European bank could also be used for a mortgage and what this might entail regarding extra costs, if any. Unfortunately as my partner never bothered to get UK residency - it wasn't needed before 2016 of course when he was here studying for his doctorate - I guess he is technically a foreign national and I don't think he can therefore be included on the RTB application form. 

Any advice very much appreciated!

lincroft1710

nightwarbler101 said:

Hi all,

I'm new to the forum so apols if there is a similar thread elsewhere. I am looking to buy my flat via RTB, I am the sole tenant and have been here for about 45 years. In a sense the flat would be being bought for me by the father of my children, who is an EU citizen and currently working in the EU. It is first and foremost a way of securing a very much-loved family home, although we are looking at it partly as an investment for our children, one of whom wants to come and study here in the UK next year, and possibly the younger one in a few year's time. My question is whether we would need to use a UK bank or whether a European bank could also be used for a mortgage and what this might entail regarding extra costs, if any. Unfortunately as my partner never bothered to get UK residency - it wasn't needed before 2016 of course when he was here studying for his doctorate - I guess he is technically a foreign national and I don't think he can therefore be included on the RTB application form. 

Any advice very much appreciated!

Your post seems contradictory. You say it is a "much loved family home", yet it appears your children do not live in the UK. A council flat is not a good investment and you have many advantages being a secure tenant.

nightwarbler101

Thank you for your comment lincroft1710.

kingstreet

You're right. He can't be included in the purchase.

You'll need a UK mortgage. He probably can't be part of that either. I know of no lender offering joint borrower sole proprietor (JBSP) to a non-UK resident and I'm not sure JBSP is even allowable on RTB.

nightwarbler101

Ok thanks for the info kingstreet.

tacpot12

 I'm not sure I agree that a council flat is not a good investment and that the advantages of being a secure tenant outweigh the advantages of being a leasehold owner. 

I bought an ex-council flat that had been bought by the previous tenant/owner under the right-to-buy scheme. The property increased in value by about 3.5% per year over the last 11 years (which is average for our area according to the Nationwide House Price Calculator).

As the owner, I have to pay my share of all the major repairs on the property (which have been about £3000 over the 11 years) and I have to pay ground rent, service charges, and buildings insurance (about £350 per year). As I get to keep the capital gain (less any CGT because I am renting it out), I'm definitely better off financially. 

However, only someone who lives in the property can buy it using the right-to-buy scheme. There is no way the council will accept that you have the right to buy your home if you can't get the mortgage yourself.

nightwarbler101

Thank you tacpot12 for your comment. This is from the MoneySavingExpert RTB page: 

"Can a family member buy my council home for me?

There are no hard and fast rules around who should be responsible for financing the purchase of a council home through Right to Buy.

This means that a family member (or somebody else) could technically finance the purchase of your council home on your behalf.

However, legal ownership of the property would have to be in the names of those on the Right to Buy application form."

Schwarzwald

nightwarbler101 said:

Hi all,

I'm new to the forum so apols if there is a similar thread elsewhere. I am looking to buy my flat via RTB, I am the sole tenant and have been here for about 45 years. In a sense the flat would be being bought for me by the father of my children, who is an EU citizen and currently working in the EU. It is first and foremost a way of securing a very much-loved family home, although we are looking at it partly as an investment for our children, one of whom wants to come and study here in the UK next year, and possibly the younger one in a few year's time. My question is whether we would need to use a UK bank or whether a European bank could also be used for a mortgage and what this might entail regarding extra costs, if any. Unfortunately as my partner never bothered to get UK residency - it wasn't needed before 2016 of course when he was here studying for his doctorate - I guess he is technically a foreign national and I don't think he can therefore be included on the RTB application form. 

Any advice very much appreciated!

besides others, one question will be around need to get a mortgage.
If you/your partner needs to get a mortgage as you cant get one, it might become tricky.

EU banks are unlikely to take security against a non-EU asset, so rather unlikely to lend.
in addition to jurisdiction, there are issues around EUR vs GBP.
There is EU legislation in place that restrict EU banks to lend in EUR against GBP assets.

UK banks are unlikely to lend on overseas EUR income.

there might be ways around it, but dont expect it to be as straight forward as a typical lending situation.

other question is around eligibility of him to purchase under RTB, but i cant comment on that.

if a coucil property is a "good" investment is a whole other debatable question.

nightwarbler101

Thanks Schwarzwald for your comment and info. Seems to me that I would have to be the sole owner as I don't think partner can be on the RTB application; but they would be the one getting the mortgage. It's a tricky one and may not be possible I guess.

sheramber

nightwarbler101 said:

Thank you tacpot12 for your comment. This is from the MoneySavingExpert RTB page: 

"Can a family member buy my council home for me?

There are no hard and fast rules around who should be responsible for financing the purchase of a council home through Right to Buy.

This means that a family member (or somebody else) could technically finance the purchase of your council home on your behalf.

However, legal ownership of the property would have to be in the names of those on the Right to Buy application form."

Family  members can provide  money  to finance the purchase but that is a separate transaction to the tenant buying . 

It is unlikely someone could get a mortgage to buy a property that they did not own as the lender would not have any security for their money. 

If he could secure a loan other than a mortgage on the flat, he could give you the money to purchase it.