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Right to Buy - helpful or harmful?

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  • Right to Buy - helpful or harmful?

    I wondered what everyone's thoughts were on Right to Buy - it's a hot topic and often people have very strong feelings about it. It can be a great chance for people to get on the ladder, especially if they have lived in their council house for a long time, but on the other hand, there is a shortage of local housing.

    Anyone used Right to Buy, or have any strong feelings about it?

  • #2
    I guess everyone heard stories about people buying cheaply and then quickly selling on for a profit, which initial loophole has been kind of closed by the introduction of a so-called pre-emption period. During this period (typically 5 years), the property can be sold on, but part or all of the discount has to be repaid to the council.

    As a mortgage broker, it wouldn't be appropriate for me to express an opinion here, but I've done many right to buy transactions for clients and it's good for them. It's a relatively straightforward process in my experience.

    These properties are not meant to be rented out, since, in theory, the person who bought it with a discount has nowhere else to live. In practice, we are all aware that life situations can be different. When someone does want to rent it out, then they should get at least a consent to let from their lender or remortgage to a buy to let deal. Again, probably quite a few people have done neither and rent it out anyway, but I can only say that it's breaking the law, so it shouldn't be done.

    If someone does want to remortgage to a BTL deal, then most lenders' requirement is that the pre-emption period has ended. However, it is possible to do it within the pre-emption period, so don't be afraid to seek a broker's help.

    www.bluewingfinancials.co.uk
    Last edited by Lilla D; 04-04-2018, 03:08 PM.
    I am a Mortgage Advisor
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