Buying ex council house... nightmare

Mr CJ

Hi,

I am trying to find info for a friend here is the situation

After yrs searching for a house for his principle place of residence with his girlfriend he found a house on the market beside his family. After having a total nightmare with the banks for months he finally was granted a loan (miracle).

He won the bid on his dream property... more months of torture followed with paper work and abruptly the light at the end of the tunnel was switched off thanks to the council.

As he is a second time buyer trying to buy a house in a council estate he is not allowed to purchase the property over some crazy out dated law going back to the 60s?

You hear on the news that the government are desperate to increase property sales and have implemented incentives to make it happen yet some (in my opinion) backward legislation is preventing a sale of a property to a genuine person who wants to live in it and raise a family?

Can anyone give me a link on where I can find this legislation that permits only first time buyers to purchase ex council homes? Does this law still stand nearly 35yrs later? Is it part of the 1966 housing act? this seems totaly crazy to me.

Thanks for any help in advance

the_syco

Mr CJ wrote: »

As he is a second time buyer trying to buy a house in a council estate he is not allowed to purchase the property over some crazy out dated law going back to the 60s?

Is it still a council estate, or have it's owners all bought their houses off the council? And is he buying from the council, or a person? If buying off a person, how does the law stop him? I'm confused.

Mr CJ

the_syco wrote: »

Is it still a council estate, or have it's owners all bought their houses off the council? And is he buying from the council, or a person? If buying off a person, how does the law stop him? I'm confused.

Hi, your not the only one confused, it is a sth Dublin County Council Estate, the person selling the property owns it yrs now this is why he should be able to sell it to who ever is willing to buy it but this law is trapping him in his property.

Seemly this law still stands as it is an ex council property, think it has something to do with tenant purchase scheme back in the 70s and he is required to get consent to sell his own home from the council :eek: but like I say he owns the property himself for yrs

crabfeet

There are restrictions imposed on people who buy houses from the Council. One is that the next three purchasers must be families in need of housing. It is designed to prevent the flippping of houses and former tenant purchasers becoming tenants again. Sometimes a chat with a local politician can help.

Mr CJ

crabfeet wrote: »

There are restrictions imposed on people who buy houses from the Council. One is that the next three purchasers must be families in need of housing. It is designed to prevent the flippping of houses and former tenant purchasers becoming tenants again. Sometimes a chat with a local politician can help.

I can understand that but the fact is the seller has shown proof that the other property he wishes to move in to is his and is paid for... it is basically a swap.
My friend wants to move into the house and raise a family, everything is done finance etc he is ready to move in today, there is no logic to this.

Is it not our constitutional right to buy a home from a private individual who owns the property?

They really need to wipe the cobwebs of the books containing this legislation and amend it... we are in the 21st century... we will not be the first or the last people it will effect & in todays market there are very very few 1st time buyers so anyone out there owning an ex-council home might be trapped there until a 1st time buyer shows up.

Thanks for that, but with all do respect to politicians they cant scratch there bum today without someone giving out.... the law is the law

ellejay

Wicklow County Council have similiar restrictions.

I'm aware of one guy who bought a very nice large plot off the council and built a very nice 3,000 sq ft house on said plot.
Then wanted to sell but "couldn't" because one of the stipulations was that he could only sell to a first time buyer.

Yet no first time buyer could afford his asking price.
I say "couldn't" because if he lowered his price he "could" sell.

Another person I know had a similiar problem to yourself, but he was able to prove to the council that he had a genuine need for housing.
Op, can you go to the council offices, meet with the housing department, and find out exactly what they need to see?
Sometimes this is the quickest route when dealing with councils, so at least when you're phoning them they can put a face to a name.

Lj.

Mary Hairy

Mr CJ wrote: »

Is it not our constitutional right to buy a home from a private individual who owns the property?

No it is not! The house wqas providfed originally by a public authority who provide housing to people unable to houise themselves. The authority sold it at a discount to a tenant. They were perfectly entitled to impose restrictions on that tenant's dealings with it. All constitutional rights are subject to the common good.

Mr CJ

ellejay wrote: »

Wicklow County Council have similiar restrictions.

Another person I know had a similiar problem to yourself, but he was able to prove to the council that he had a genuine need for housing.
Op, can you go to the council offices, meet with the housing department, and find out exactly what they need to see?
Sometimes this is the quickest route when dealing with councils, so at least when you're phoning them they can put a face to a name.

Lj.

All the required paper work was sent in its just the consent to sell the property has not been granted dispite the buyer being a genuine person wanting to live in it and raise a family

Treehouse72

Sorry OP, my sympathies are limited. Buying an ex-council house is not a right, and certainly not simply on the basis that it is someone's "dream home". Sounds to me like this is bubble time thinking: get out of my way, I want to buy my dream gaff! No, that won't do any more. The regulations are there for a reason, and that reason seems legitimate to me.

As for the government's desire to boost property sales, a good rule of thumb is that whatever this governement says it wants, assume the direct opposite is best for the country. In this instance, boosting house sales is a dead end that will lead to more ruin. Just because those idiots on Merrion Street want it doesn't mean it's a good idea.

So with respect your narrow sectional interest in this matter is clouding your judgement and you are not an impartial commentator. The regulation seems sound to me and we do NOT want increased housing activity until prices fall to long-term sustainable levels.

Mr CJ

Mary Hairy wrote: »

No it is not! The house wqas providfed originally by a public authority who provide housing to people unable to houise themselves. The authority sold it at a discount to a tenant. They were perfectly entitled to impose restrictions on that tenant's dealings with it. All constitutional rights are subject to the common good.

I agree as you stated yourself "tenant", there is no longer a tenant as the property has been paid for yrs ago.

The idea behind this law is that it was an affordable housing scheme and it was to prevent investors buying and selling these properties back in the 60s - 80s but now all the homes are privatley owned and the fact that these houses are in some cases more expensive than private houses this law makes no sense, there is no logic to it, please explain to me where is the common good in this situation?

kmick

Tell your friend to walk away. The day you buy is the day you sell and he is going to have these problems if he ever goes to sell it again. Any solicitor will advise him but he should cut his losses and move on.

Mr CJ

Treehouse72 wrote: »

Sorry OP, my sympathies are limited. Buying an ex-council house is not a right, and certainly not simply on the basis that it is someone's "dream home". Sounds to me like this is bubble time thinking: get out of my way, I want to buy my dream gaff! No, that won't do any more. The regulations are there for a reason, and that reason seems legitimate to me.

QUOTE]

So you think its perfectly fine for people to be trapped in there own homes and not being able to sell there home to a potential buyer so he can live near his family because he is a second time buyer given the fact that the house is privately owned and no longer an affordable house??
This regulation does not belong in our present time, I fully agree that new affordable housing should have regulations like this but 40yrs later seems crazy to me?

Can you please explain to me what is the reason for this regulation as it makes no sense to me and everyone else I speak to? they actually laugh at how ridiculous it is as they are shocked

Treehouse72

Mr CJ wrote: »

So you think its perfectly fine for people to be trapped in there own homes and not being able to sell there home to a potential buyer so he can live near his family because he is a second time buyer given the fact that the house is privately owned and no longer an affordable house??

As far as I can see, this is the first time you have mentioned that your friend is "trapped" in his home in a location he doesn't want to live in. How was I supposed to know about this stuff when you never mentioned it? Please don't go off on one about my opinion when your explanation of the situation was not complete.

Now, piecing it all together, please correct me if this is wrong:

> Your friend is in negative equity in his current home
> He no longer wants to live in the house
> But he cannot sell because of the NE...hence your description of him being "trapped"
> He has found a cheaper, ex-council house to buy instead
> The difference between the price he would get for his current place, and the price of the council house is enough to wipe out some or all of the NE on his current property
> So your friend hopes to essentially "swap" his previously expensive house that is in NE for a cheaper one with no NE attached to it, keeping his mortgage payments the same or, perhaps, reducing them

How close am I?

Can you please explain to me what is the reason for this regulation as it makes no sense to me and everyone else I speak to? they actually laugh at how ridiculous it is as they are shocked

If I am correct with the above (and my apologies if I am not), then an answer to your question becomes clear: because council housing is not a means by which people can rid themselves of their NE. Council houses are for poorer people who cannot afford homes on the open market. At least, that's how it works in civilised countries.

So, should we allow anyone who wants to snap up council houses? Or should we maintain regulations that help preserve these houses for the needy? If it's the former, do you know what would happen? There would be a bubble in ex-council houses, that's what. Sound like a good idea?

I could also point out that the reason poorer people can't afford homes is because other people bid up the property market during the bubble, taking on mortgages they couldn't afford on absurdly expensive properties, thus squeezing poorer people out of the market. And yet now, the very same people who were priced out during the bubble are again to be priced out by a deluge of people with too much debt snapping up "their" council houses? I very much hope you can see what a hopeless, disastrous dead-end this would be.

Mr CJ

Treehouse72 wrote: »

As far as I can see, this is the first time you have mentioned that your friend is "trapped" in his home in a location he doesn't want to live in. How was I supposed to know about this stuff when you never mentioned it? Please don't go off on one about my opinion when your explanation of the situation was not complete.

Sorry there is a misunderstanding, when I say trapped I am talking about the guy who is selling his house to my friend which is an ex council property, he fully owns his house and has been living in it for nearly 40yrs he wants to move to a different property which he now owns.

My friend already has a property which is currently rented out and now wants to buy this house as his family lives close by and it is the ideal place to raise a family.

Treehouse72 wrote: »

If I am correct with the above (and my apologies if I am not), then an answer to your question becomes clear: because council housing is not a means by which people can rid themselves of their NE. Council houses are for poorer people who cannot afford homes on the open market. At least, that's how it works in civilised countries.
So, should we allow anyone who wants to snap up council houses? Or should we maintain regulations that help preserve these houses for the needy? If it's the former, do you know what would happen? There would be a bubble in ex-council houses, that's what. Sound like a good idea?

Another misunderstanding, I completely agree with you and there is a need for regulations when it comes to affordable housing but in this situation we are not talking about houses built a few yrs ago we are talking about houses built in the 70s and all the houses are privatley owned and now they are as expensive as any other property and are no longer affordable... surely you can see my point of view that it is a bit crazy? I dont know what way other people view this but I find it very unfair not only for my friend but for home owners who are literally trapped in there own home and can only sell there (expensive) homes to first time buyers

Treehouse72 wrote: »

I could also point out that the reason poorer people can't afford homes is because other people bid up the property market during the bubble, taking on mortgages they couldn't afford on absurdly expensive properties, thus squeezing poorer people out of the market. And yet now, the very same people who were priced out during the bubble are again to be priced out by a deluge of people with too much debt snapping up "their" council houses? I very much hope you can see what a hopeless, disastrous dead-end this would be

A little of topic but with all do respect you cannot blame these buyers back in 06 for "squeezing" out poorer people as most people caught up where young couples starting off and the media + banks did not help the situation as they felt they had no choice but to buy buy buy as they where in fear that they could not afford it in the near future

I have to emphasize the fact that I agree 100% with you and it would cause cahous if anyone could buy affordable housing but I hope you understand that the property I am talking about is no longer affordable for the last 15yrs or so and this is why I find this regulation out dated and crazy in this situation

Cheers

Mary Hairy

This has nothing to do with affordable housing. The person who is buying it has a house. He is trying to become a speculator living in an ex xouncil house. What is to stop him living in the one he is renting out?
The Counciol built that house, leased it at less than market rent, maintained it and then sold it for less than markety value. Now some speculator wants it. He can go jump. the current occupier can find another buyer and if he has to reduce his price to attract a purchaser, that is no more than the justice of the situation requires.

Mr CJ

Mary Hairy wrote: »

This has nothing to do with affordable housing. The person who is buying it has a house. He is trying to become a speculator living in an ex xouncil house. What is to stop him living in the one he is renting out?
The Counciol built that house, leased it at less than market rent, maintained it and then sold it for less than markety value. Now some speculator wants it. He can go jump. the current occupier can find another buyer and if he has to reduce his price to attract a purchaser, that is no more than the justice of the situation requires.

It must be great to see everything as black and white...

Where are you getting the word speculator from? He is paying good money for this house it is not cheap nor is it an investment property, he wants to use it as his home. Because of this the vendor is stuck in his own home and has to wait for god knows how long for a first time buyer? You agree to this madness??

iguana

Mr CJ wrote: »

It must be great to see everything as black and white...

Where are you getting the word speculator from? He is paying good money for this house it is not cheap nor is it an investment property, he wants to use it as his home. Because of this the vendor is stuck in his own home and has to wait for god knows how long for a first time buyer? You agree to this madness??

He definitely can't buy the ex-council house if he owns an investment property. Why doesn't he sell his first property?

Mr CJ

iguana wrote: »

He definitely can't buy the ex-council house if he owns an investment property. Why doesn't he sell his first property?

It is ex-council so I still do not understand why the council still have ther claws in any transactions of the house it makes no sense.

He would not be able to sell his other house as it is in negative equity.

If the house prices came down by half as what they are now most first time buyers will still not be able to get the finance as the banks (too late) have tightened up on lending dramatically.

This is going off on a bit of a tengent, my main question is can anyone point me to the legislation that states 1st time buyers can only buy ex-council property 40yrs on??

Thanks

iguana

The council still have their "claws" in it because that is what the tenant purchase contract stipulated. The current owner agreed to that when he bought it. As kmick stated, the day you buy is the day you sell. the purchasor agreed to this when he bought it, he can't change it now because it doesn't suit him.

Mr CJ wrote: »

If the house prices came down by half as what they are now most first time buyers will still not be able to get the finance as the banks (too late) have tightened up on lending dramatically.

Which will only drive prices down even further, that's how it works.

LittleBook

Clearly the council could retain some control over the property after it has been purchased as part of a tenant purchase sales scheme/affordable housing scheme ... even after 40 years I guess.

But I understand your confusion as so many "ex" council houses appear to have been easily bought and sold on the open market over the past years.

However, you are not the seller, your friend is the buyer. Who knows what the terms of the current owners purchase contract is? It's even possible that this isn't the real reason why the sale is blocked.

If the current owner (really) wants to sell their property then I would think it is up to them to deal with the council to clear the sale.

There's little or nothing your friend can do about it.

Mary Hairy

Mr CJ wrote: »

It must be great to see everything as black and white...

Where are you getting the word speculator from? He is paying good money for this house it is not cheap nor is it an investment property, he wants to use it as his home. Because of this the vendor is stuck in his own home and has to wait for god knows how long for a first time buyer? You agree to this madness??

It is great to be able to read black and white. Like most people I learned to do it as a child. The vendor got a cheap house from the council. He did not have to save a deposit and buy a house privately. He is not stuck in the house. If he asks the right price he will find a buyer. He has actually bought another house and stayed on in his council built home. He has played the system. Now the system is redressing the situation. That's how it is. There is no such thing as a free lunch.

djimi

Mr CJ wrote: »

It is ex-council so I still do not understand why the council still have ther claws in any transactions of the house it makes no sense.

He would not be able to sell his other house as it is in negative equity.

If the house prices came down by half as what they are now most first time buyers will still not be able to get the finance as the banks (too late) have tightened up on lending dramatically.

This is going off on a bit of a tengent, my main question is can anyone point me to the legislation that states 1st time buyers can only buy ex-council property 40yrs on??

Thanks

It seems pretty clear cut to me. The seller originally purchased the house under the stipulation that they could only sell it on to a first time buyer. Your friend is not a first time buyer, therefore they cannot purchase the house. Its not the fault of your friend, but it sounds to me that unless the council overlook the terms of the original sale then your friend is not entitled to buy the house, end of story.

It might be a tad unfair to the seller that they are effectively "trapped" in the house, but that was the arrangement that they agreed to when they purchased the house.

helenmo

Cheers for this. Am hoping that it doesn't take months though - was hoping to be in the house for Christmas!

I'll post with updates when the solicitors have had some dialogue and we get the next step.

Thanks

Hel

CuppaCocoa

helenmo wrote: »

Cheers for this. Am hoping that it doesn't take months though - was hoping to be in the house for Christmas!

I'll post with updates when the solicitors have had some dialogue and we get the next step.

Thanks

Hel

Oops, are you getting confused with your multiple accounts? :rolleyes: