Housing Bill
Presently council tenants are able to purchase their rented property after 2 years of tenancy. However, this is about to change. As of the 18th January 2005, the new Housing Bill becomes law and the current 2 years will change to a period of 5 years. This means, that once the proposals come into force, any new council tenant will have to wait 5 years before having the option of buying their property.
There is also a proposal to extend the period during which landlords can require owners to repay some or all, of the discount given on a property in the case of an early resale.
Currently, purchasers of a property that has been bought on the right to buy scheme, can sell after 3 years with no requirement to make any repayments of the discount. The proposal suggests this should be extended to 5 years. Therefore, anyone who sells a property bought under the right to buy scheme within 5 years of the purchase, will be requested to repay a percentage of the given discount. Repayment figures are as follows: -
Currently
Sale within the 1st year - 100%
Sale within the 2nd year - 66%
Sale within the 3rd year - 33%
Proposal amounts
Sale within the 1st year - 100%
Sale within the 2nd year - 80%
Sale within the 3rd year - 60%
Sale within the 4th year - 40%
Sale within the 5th year - 20%
With the predicted drop in house prices in 2005 (meaning lower property valuations) combined with the new proposals further restrictions on council tenants wishing to purchase, now may be a good time to consider a right to buy.
The proposed changes in the right to buy scheme include measures to reduce the attraction of purchasing a discounted property with the prospect of selling it to make a profit.
The initial idea of the right to buy scheme was to give ordinary families the opportunity to own their own homes, something they may not have been able to afford otherwise. However there are concerns about the effects this has had on local housing stock and a number of people profiteering from potential windfalls in expensive property areas.
Exploitation in the Right to Buy Scheme
There have been several schemes where third party companies encourage tenants to purchase their homes under the right to buy scheme, by offering them cash incentives. The tenant purchases the property at a discounted price under the right to buy scheme and simultaneously exchanges contracts to sell the property to the company after 3 years at which point no discount penalty will be repayable. The tenant will lease the property to the company and move out of the home with a cash sum. This leaves the company free to rent out the property at the current market rental rates.
After three years the tenant sells the property to the company. The company will either continue to rent the property at market rates or the property will be sold on at a substantial profit.
The incentive for the tenant is the lump sum offered, which can be anywhere from £5000 to £26000 but is usually a percentage of the equity of the purchased property. This could be attractive to tenants who do not wish to purchase their current home or hope to purchase a property in another area as it will give them a ready made deposit to buy another home.
The new proposals are designed to make this type of sale less attractive and prevent profiteering as well as securing local housing for the less well off.
The proposed changes in section 180 and 182-189 of the Housing Act 2004 will come into effect on 18/1/2005.
For more information on a right to buy mortgage, visit Right To Buy website.
Nicola Bullimore has been working with people to resolve debt problems for a number of years. For more information regarding debt issues, please visit Debt Questions website.
Latest News
Interest rate drop opens door to refinancing Austin American-Statesman, TX - By Shonda Novak, MS Taboada The recent sharp drop in mortgage interest rates is creating a window for homeowners nationwide to refinance and providing an ... Looking to refinance? Now might be the time |
 FinFacts Ireland | Ben Bernanke: Fresh Attack on Mortgage Rates U.S. News & World Report, DC - Lower rates will enable some borrowers to refinance out of adjustable and into fixed-rate loans. But those who need to refinance the most have homes with ... Long Bond Returns Most Since 1995 as Rosenberg Sees ‘Bubble’ Treasury Yields Hit Record Lows, But Will it Last? REFILE-TREASURIES-Bonds rally, helped by weakening economy |
Self-Employed Are Frozen Out of Mortgages Wall Street Journal - He's been unable to find a lender willing to refinance the $900000 adjustable-rate mortgage on his primary residence, which he says is worth around $1.1 ... |
Md. sees drop in loss of homes Baltimore Sun, United States - Many borrowers took on mortgages at the height of the housing boom, believing they could eventually refinance to a lower loan rate or sell their homes if ... |
Wolters Kluwer Financial Services Begins Development of Hope for ... MarketWatch - For borrowers who refinance under H4H, lenders are required to "write down" the mortgage to the Department of Housing and Urban Development (HUD)-provided ... |
 Straits Times | Mortgage rates fall, but many borrowers will have trouble qualifying Los Angeles Times, CA - Jeff Lazerson, a Laguna Niguel mortgage broker, said all the customer calls he received Tuesday were from people seeking to refinance, not buy homes. ... Mortgage-market revival: Try, try again Last Call for Smart Homeowners US move cuts mortgages to lowest rate since February |
New mortgage crisis looming, experts caution San Bernardino Sun, CA - And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure. ... |
Good time to refinance your mortgage? WKTV, NY - By GARY LIBERATORE (WKTV) - If you are in the market to buy a home, it's a really good time, but if you're selling, it's not so good. ... |
A recession Q&A Newsday, NY - ... take measures that will result in lower mortgage rates, "so people can afford to buy up housing inventory and refinance mortgages at affordable rates. ... |
Great Wolf continues mortgage negotiations Wisconsin State Journal, WI - Because of the economy, refinancing arrangements are taking longer and are structured differently than in the past, he said. The resort continues to operate ... BRIEF: Great Wolf still talking with lenders |
Resources
-
bad credit home loan, Refinance Mortgage loan, cash loan, cash advance loan, california home loan, p
Online bad credit home loan, Refinance Mortgage loan, cash loan, cash advance loan, personal loan, debt consolidation loan, payday loan, bad credit loan, home improvement loan, second Mortgage loan, online loan, unsecured personal loan Search.