Right to Buy before 21 November deadline, what are the implications?

Solid_Bruce

Enquiring for my elderly parents who have lived in a London council flat for 40 years

It's a long shot that they can afford it but we want to put in an application before the deadline and then weigh the possibility of buying the property depending on the valuation

My questions are -

1) Simply by puting in an application how would this effect them? Council Tax, Housing Benefit, Service charges and repairs etc..

2) If we then reject the offer because we can't afford it are any of the above points perminently affected? i.e. if council repairs stop during application for RTB, are these automatically reinstated after RTB is rejected and cancelled.

In essence, can we apply for RTB and if we reject the offer are there any perminent implications to any costs and benefits?

Thanks in advance

housebuyer143

Is it in there interest to buy it? Remember all the repairs cost money and can they afford these unexpected costs if the council are not doing the repairs? 
What happens to the service charges, I imagine they are covered also by the council. 

I've seen posts on here where the parents want to leave something to their children but in doing so they actually cripple themselves in retirement because they can't actually afford the added costs associated with home ownership. 

Mildreds_Earrings

1) Simply by puting in an application how would this effect them? Council Tax, Housing Benefit, Service charges and repairs etc..

If your parents are in receipt of Housing Benefit, are you confident that they can afford mortgage payments? How can your parents pay for monthly service charges and their share of major repairs to the block/estate? 
The Council will only carry out urgent/emergency repairs during the RTB process. 

2) If we then reject the offer because we can't afford it are any of the above points perminently affected? i.e. if council repairs stop during application for RTB, are these automatically reinstated after RTB is rejected and cancelled.

Repairs will be reinstated once the RTB claim has closed. 

Solid_Bruce

housebuyer143 said:

Is it in there interest to buy it? Remember all the repairs cost money and can they afford these unexpected costs if the council are not doing the repairs? 
What happens to the service charges, I imagine they are covered also by the council. 

I've seen posts on here where the parents want to leave something to their children but in doing so they actually cripple themselves in retirement because they can't actually afford the added costs associated with home ownership. 

They are thinking of it like an investment with the discount RTB is offering

Solid_Bruce

Mildreds_Earrings said:

1) Simply by puting in an application how would this effect them? Council Tax, Housing Benefit, Service charges and repairs etc..

If your parents are in receipt of Housing Benefit, are you confident that they can afford mortgage payments? How can your parents pay for monthly service charges and their share of major repairs to the block/estate? 
The Council will only carry out urgent/emergency repairs during the RTB process. 

2) If we then reject the offer because we can't afford it are any of the above points perminently affected? i.e. if council repairs stop during application for RTB, are these automatically reinstated after RTB is rejected and cancelled.

Repairs will be reinstated once the RTB claim has closed. 

Thanks for the reply.  It has come to light that they don't get housing benefit (I thought they did)

Kaybenson

Quite enlightening. Thanks 

Emmia

To put this into context, we have a bill for repairs on the building our leasehold flat is in for a little under £11k coming in January, this is for maintenance activities which get done about once every 10 years. We have also forked out over £10k on new windows and a door to replace those that were rotten in the last 12 months.

We can't avoid the £11k charge coming in January, and we did the windows as it was clear they weren't going to be dealt with by the freeholder before they became a real security issue (and we'd have ended up paying for them anyway)

Before you do RTB I'd really look into what the potential costs might be that your parents will become liable for,  that they're not now.

Edit: If the boiler dies they're responsible, and plumbing issues, guess who is paying for the plumber...

I can see the attraction in the discount, although I question the morality of RTB as it depletes the stock of social housing your parents have benefitted from for 40 years.

housebuyer143

Solid_Bruce said:

housebuyer143 said:

Is it in there interest to buy it? Remember all the repairs cost money and can they afford these unexpected costs if the council are not doing the repairs? 
What happens to the service charges, I imagine they are covered also by the council. 

I've seen posts on here where the parents want to leave something to their children but in doing so they actually cripple themselves in retirement because they can't actually afford the added costs associated with home ownership. 

They are thinking of it like an investment with the discount RTB is offering

An investment for who though? They have lived there for 40 years and they suddenly want to buy it now? A house you live in isn't an investment because they need to live in it - it's not going to make them money, so they are obviously planning to pass it down. 
It doesn't scream to me that it's in their interest. What if they need to move to different accommodation as they get older? The council will aid them in this, but are not likely to help if they own the house. 

How well off are they? Can they afford the mortgage? The service charge, repairs and improvements? Will owning the flat actually cause them issues in retirement because they suddenly don't have any money to live on? 

Really think it through because while I appreciate they don't want to lose a good deal, it might not be suitable or in their best interests to do this. 

sheramber

How will they benefit from this "investment"?

Are they intending selling it after the  restriction on selling period is ended?

If they do, where will they live?

Jude57

Solid_Bruce said:

Enquiring for my elderly parents who have lived in a London council flat for 40 years

It's a long shot that they can afford it but we want to put in an application before the deadline and then weigh the possibility of buying the property depending on the valuation

My questions are -

1) Simply by puting in an application how would this effect them? Council Tax, Housing Benefit, Service charges and repairs etc..

2) If we then reject the offer because we can't afford it are any of the above points perminently affected? i.e. if council repairs stop during application for RTB, are these automatically reinstated after RTB is rejected and cancelled.

In essence, can we apply for RTB and if we reject the offer are there any perminent implications to any costs and benefits?

Thanks in advance

Remember, too, that ALL repairs aerial maintenance to the entire block become a joint liability with the Council and any other owners. So that means if repairs or replacement is needed for the roof, the windows, the wiring, the heating system for the communal areas, the external doors (and internal flat 'front' doors if required to meet changing safety standards), drainage, decoration of communal areas, maintenance of lifts  much more, it's your parents who will be required to contribute. They'll have little to no say in what work is done, when, nor who does the work and for blocks, something as apparently straightforward as window replacement can be astronomically expensive when scaffolding etc is factored in. Often, these types of capital works are not planned very far ahead so while the Council may have no plans in place today, come March (to use up any budget surplus) or April (to ring-fence newly allocated budget) that could change. Not to belabour the point too much, your parents need to know that they can't refuse to have certain work done even if they own their flat, such as windows and their front door because they have to be uniform for the external appearance of the block and must meet various safety standards. Residents who refuse may find their front door forced by warrant so that the work can be done and then they'll be invoiced for the cost of that, too.

As attractive a proposition as the RTB discount is, and as much as your parents love their family home of 40 years, as tenants they have security, all repairs and renovations are covered. If they need specific adaptations to make their home safe for them physically as they age, the Council will assess install and pay for those. Plus, should the flat become unsuitable for their needs, the Council will help them (and sometimes actually pay them) to move to somewhere more suitable, say sheltered or supported housing. 

At the moment, your parents are safe and happy in their home. I'd say that's the main objective for us all as we age and worrying about paying for maintenance on my home is something, as a tenant, I never need to think about.

Murphybear

I agree with many of the others.  Your parents are elderly so I don’t see the point of having a flat as an investment.  Being a property owner is very different from being a tenant.  They will liable for all the maintenance issues which are funded by the council at the moment.  Have you/they done a benefit check to see if they are entitled to some help with the rent.  What help they get depends on their income and savings.  

Have a look at the benefits board.  If either of your parents have any care needs they may be entitled to Attendance Allowance.  If they get this it changes the threshold for getting housing benefit.  It also changes the threshold for getting Pension Credit.  Getting Pension Credit usually means they can get all the rent paid but this is dependent on their savings.

Sorry if this sounds a bit convoluted but nobody ever said the benefits system in our country was easy.   . If you need more information both Age U.K. and Citizens Advice are very helpful.

All the above is based on personal experience.