Council House Right to Buy

Discussion in 'Finance, Property, Law' started by Yosser, Apr 14, 2007.

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  1. My in laws have the right to buy their council house with a fairly significant discount. They cant however afford to buy it. - I can !

    I am planning on funding the purchase (which has to be in their name) and after the set time (5 Yrs) the place is transfered into my name and becomes mine. They become my tennants and then when they pop their clogs I flog it and make a tidy profit.

    Sounds simple enough - anyone got any experience or points to make on this sort of scenario.
  2. This sounds good in a perfect world but five years is a long time and anything can happen .

    I have read cases where elderly people as let there younger familys buy their home ,They did not live long enough before the set time and the person who bought the house had to pay all the discount back .

    On the plus side you could move in with the inlaws for a couple of weeks and have all your names put on the deeds but make sure that the inlaws put that anything happen to them that the property is transfered to you.
  3. Be very careful about buying a property in someone elses name. Things you need to think about are:

    If you fall out - what come back do you have? The house is in their name!

    If they die, who inherits the house? - either who is stipulated in their will or the laws of intestacy kick in -you can google these!

    I'm no lawyer, but if you speak to one I'm sure there's a way you can do this that covers you.
  4. Are you loaning them the cash to do this or are you raising monies on your own property to buy it?

    How old are they?

    I suppose there is nothing wrong with you loaning them the full amount and placing a charge on the property to protect your investment in the same way a bank or building society would. Be sure that you are the main beneficery in any will.

    If they are seen to have bought it with cash, then it is unlikley that they will be able to claim any kind of housing benefit or assistance in this time as it would appear that the property is owned outright.

    You could draw up a loan agreement, so that the loan is secured against the poroperty and interest at a rate to suit yourself is paid.... should they then fall unemployed or ill etc, there (maybe) a scenario where the state may pay the interest on the loan.

    the reason I ask you if you are loaning the cash or raising it on yours is because the money raised will cost you... ie you will be paying back a mortgage at a higher monthly payment than you were... be sure to work the sums out, as to how much it is actually costing you.

    Other than that relish in the thought that the inlaws are in a council house and you aren't :D
  5. Sounds like a good idea but the pitfalls are many. Work out what can go wrong including falling out with the wife and in-laws, and then ask a solicitor to work out the legal side.

    If their name is on the deeds - you do not have a leg to stand on - and would have to sue to gain access to the house - and that costs money.

    And who pays for the dead boiler? Missing roof tiles? Painting? If you charge them rent, then you will end up spending hours with a tax return each year (ah, bliss). Get it tied up before you start!

  6. Do you already own your own house ? If not, this is a risk you may regret...they could live way beyond your retirement.

    Remember that you will need to get a firm tenancy agreement and that any income you receive you will then be taxed on.
  7. My mate is going through this, he had to speak to a solicitor and draw up a document known as a 'life rent', this gives his gran a legal standing if he decides on changing the name on the deeds to turf her into the street. To me this is a two sided event, and may lead to a serious fall out if not handled correctly on both sides.

    Proceed with caution.
  8. Good advice from all, plus how old are you now?
    What if the in laws live for another 30 years.
    Also the law on being a landlord have just changed with a lot of emphasis on the landlord on what they must provide in regards to safety, deposits etc.
    Once again get a lawyer to sort it all out. Good luck though
  9. They can apply for a mortgage in their own right with you as a guarantor. You need to ensure that the property is left to you in the will. The Council will not claw back any discount upon death
  10. i looked into this some time ago...with an EX of mine, he was going to buy my house and after checking with the civic centre we could of applied to have my name put on the deeds after about 3 months for a fee of about £350, which sounded good to me as i have 2 kids, or he could go onto the rent book and after 12 months we could of applied to buy it jointly...hope this is of some help!
  11. one thing further you need to think about is if you are going to buy your inlaws home . If they are having housing benefit to pay towards there rent in the home they are renting now they wont be able to claim housing benefit when you have bought there home .

    for some reason even though its not against the law to buy your in laws home . you cant receive housing benefit for a home which you have previously bought and you are going to have to include your in laws name on the deeds when you first buy there home because only they can receive the discount for living in the council property