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Right to Buy flat warning

Gers
Gers Posts: 13,368 Forumite
Part of the Furniture 10,000 Posts Photogenic Name Dropper
in House buying, renting & selling
https://www.theguardian.com/money/2019/may/18/a-terrible-shock-council-flat-owner-bill-tustin-estate

So often there are members who ask about buying a flat from their local council with a view to 'securing their future'.

This article shows the other side.
«1

Comments

  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    not surprised and in some ways people don't see the cons and only the £££ to make off tax payers.

    I wouldn't be surprised if they come on here about being mis sold on this
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    edited 18 May 2019 at 10:22AM
    "Onuoha bought his flat on the Tustin estate in Peckham in 2004 using right to buy. Back then, the flat was valued at £93,000 – it’s worth about £250,000 now. In 2010, he moved out of the property and started letting it out, as it was not big enough for his growing family."

    "For those leaseholders who live in their property, the council has offered to buy their home for 40% of its market value and offer them a secure tenancy.
    ...
    Southwark is also offering to buy back properties of both residents and landlords at full market value."

    So whatever happens, nobody's going to have to move home*. He gets to crystallise his £157,000/15yr capital growth. If he wasn't letting it, he'd have the opportunity to become a secure council tenant again, with a small capital growth on top of getting the original purchase price back.

    Ohnoes. How terrible for all concerned.

    Edit:
    * - except his private-sector tenants, obvs...
  • diggingdude
    diggingdude Posts: 2,499 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    The thing that disgusts me most is the renting of right to buy properties
    An answer isn't spam just because you don't like it......
  • Lioness_Twinkletoes
    Lioness_Twinkletoes Posts: 1,573 Forumite
    edited 18 May 2019 at 11:04AM
    Yeah, this is a non-story. It's a no brainer that such extensive works are going to cos a small fortune. Freeholders have a responsibility to maintain their blocks. Leaseholders, when they sign the lease, are agreeing to pay a share. Sadly a lot of leaseholders don't read the lease - all they see are £££££.

    I have no sympathy for this man. He;ll make a killing if he sells it back - at full market value. It's a joke that the Council sold it for a pittance and will buy back at full market value. One wonders then, if they put it back into housing stock....can the next tenant also buy it for a (slightly larger but still heavily discounted) price?
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    diggingdude wrote: »
    The thing that disgusts me most is the renting of right to buy properties
    225 flats in the estate. 22 privately-owned. So only 10%.

    20 of 22 privately-owned flats let. 2 of privately owned flats owned for <5yrs.
    Reckon there might be a correlation there?
  • SnooksNJ
    SnooksNJ Posts: 829 Forumite
    AdrianC wrote: »
    "Onuoha bought his flat on the Tustin estate in Peckham in 2004 using right to buy. Back then, the flat was valued at £93,000 – it’s worth about £250,000 now. In 2010, he moved out of the property and started letting it out, as it was not big enough for his growing family."

    "For those leaseholders who live in their property, the council has offered to buy their home for 40% of its market value and offer them a secure tenancy.
    ...
    Southwark is also offering to buy back properties of both residents and landlords at full market value."

    So whatever happens, nobody's going to have to move home*. He gets to crystallise his £157,000/15yr capital growth. If he wasn't letting it, he'd have the opportunity to become a secure council tenant again, with a small capital growth on top of getting the original purchase price back.

    Ohnoes. How terrible for all concerned.

    Edit:
    * - except his private-sector tenants, obvs...
    It was appraised at £93K so could that be before the discount?
  • Marvel1
    Marvel1 Posts: 7,466 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Onuoha bought his flat on the Tustin estate in Peckham in 2004 using right to buy. Back then, the flat was valued at £93,000 – it’s worth about £250,000 now. In 2010, he moved out of the property and started letting it out, as it was not big enough for his growing family.

    How convenient after the 5 years, no sympathy from me. I find it hilarious.
  • markin
    markin Posts: 3,860 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 18 May 2019 at 7:10PM
    "and says it saved up work to do in one package to take advantage of economies of scale"


    So surly he only owes a share only from when he bought it, with future costs of major repairs put aside from the day it was built, and even then he may have been paying monthly or yearly maintenance that they have been 'saving up'?

    Well that's how it should be anyway, You can bet the cost per flat is overly inflated.


    30k per flat would be 6,750,000 over 225 flats.
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Marvel1 wrote: »
    How convenient after the 5 years, no sympathy from me. I find it hilarious.
    As hilarious as the councils housing department having to fund the remaining 90% of the £27m.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    SnooksNJ wrote: »
    It was appraised at £93K so could that be before the discount?
    Good point.
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