Right To Buy Problems Loom Large

Right To Buy moved 2,000,000 homes into private ownership.

Many of those right to buy homes are now at risk in two ways, and their owners and those who subsidised the purchase need to contact us.  This could prevent total loss of their Right To Buy homes to their families.   For some, we are afraid it will be too late.. and that was how this topic was started. families all over the UK are losing out, now.

Is that fair?”

Right to Buy helped by children.

Right to Buy HouseMany parents couldn’t afford to buy their own council or housing association home without help.  Hundreds of thousands of children rushed to help their parents with deposits or mortgage guarantees.   In most cases, those children expected their financial help to be repaid on the death of the parent, with an appropriately worded Last Will.

But in practice, many are getting NOTHING – find out why….

Right to Buy to Help Children.

These  parents were a bit better off, and they wanted to be sure that future generations of their family had the ability to buy their own homes, and not to be at the mercy of the Local Council or Housing Association.  In many cases, they have succeeded, but in many more their generosity and sacrifice will be wasted and they will get NOTHING back…

The Spectre at The Right to Buy Feast.

Funnily enough, the spectre is the Local Council.   Having given you the Right to Buy, they are now greedily looking for opportunities to grab the home back from you.  And in many cases they will succeed.

It all comes down to where you have enough income (between £50,000 and £75,000 a year EACH) to pay should you need care in your old age.   If you haven’t enough income or capital to fund it, then the Council will eventually want to sell your home to fund the care.   They won’t throw you out of it, or any young children or retired relatives, but ultimately they will sell it and take the money.  If you die promptly enough, there might be some change left over.

But my children funded the Right to Buy!

There is a fair chance that they can kiss goodbye to their money, and watch it disappear into the Local Councils coffers.  In most cases the children won’t be on the deeds, so they have no clear rights.  Even if they are on the deeds, the Local Council may legally cut their share by up to 70% – that is nearly three quarters ripped away.

But I left it to them in my Will!

But in a Will, you only leave anything you still own – if the Local Council have already grabbed your Right to Buy home and sold it, or put a charge on it, it is too late.

What should I do?

Simple, all Right to Buy owners should contact us urgently.

3 thoughts on “Right To Buy Problems Loom Large

  1. Deb

    When the RTB policy came in, the council tenants, targeted to buy their properties, are now beginning to die. As a result, the arrangements (or lack of them) that they made when they bought their properties are becoming all too apparent. Far from there being an increase in property ownership, it would appear that for the most part these council tenants could not afford to buy the properties on their own, even with the significant discounts that were available to them. In many occasions, it now appears that an enterprising son or daughter, who was working, obtained the mortgage monies that were necessary in their own name. This arrangement enabled their parents to buy the property, with the benefit of the discount. However, at the time of the property purchase scheme, there were stringent claw back provisions if the property was transferred out of the ownership of the council tenant within a specified period of time – first 5 years and then 3 years.

    This caused difficulties for the son or daughter putting up the mortgage monies, unless they went to a specialist lawyer. As the vast majority did not, in many cases the exact ownership of the property was not specified. Twenty-five years on, when the original council tenants are beginning to die, this is now causing problems.

    I think the Right to Buy Policy was short-sighted by the the conservative government.

  2. SP500

    The problem with RTB as highlighted above is true. As a social worker, working with older people who can no longer live on their own and require a residential care home (which is means-tested by the council),
    I personally in my practice as a social worker, have come across many cases where the son or daughter or other family relative put up the money so that the council house could be bought under RTB. In some cases, the ownership was never transferred to the person who put up the money.
    The elderly parent loses mental capacity to make decisions, and it’s too late to transfer the property. With means-testing for social care (care homes) suddenly the elderly parent is deemed to be “rich” as they own a property (with a value over £23,500) so they have to pay the full cost of their residential care.
    There are cases where the son or daughter expected to get the 4-bedroom council house since they actually paid for it over the years, only to see the house having to be sold to pay for case home fees because the property was still in the name of the parent. Furthermore, the council can go back 6 years to see if the person needing care intentially disposed of any property to make themselves poor.

  3. Asset Protection Post author

    It’s even worse than that sp500 – Judges are saying that any discount belongs entirely to the resident, even if the son or daughter paid for everything.
    So £100,000 property, 70% discount, son pays £30,000 cash or mortgage. value triples before care is needed to £300,000.
    Judge says Council gets £210,000 and son £90,000 BUT BUT BUT only if he can prove that the £30,000 is not a gift. As he usually won’t be able to, Council gets the lot and son loses out.
    There are other things that can be done, like sue the solicitor who set it up (!) but the best thing to do is to transfer it into a Probate Home Protection Trust at the earliest possible moment, before poor health makes that too risky.
    The 6 year rule is more of a rule of thumb than a rule – there is a 6 month rule, but that’s not always helpful, but councils can go back as far as they like in an attempt to prove “deprivation” so any safety precautions need to be carefully set up. A “Home Protection Plan” means that the property is taken outside the estate for probate purposes, but not for Inheritance Tax purposes – though that is not usually a problem for RTB owners.

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