Affordable housing – buy to let trap

Affordable housing – buy to let trap

17:28 PM, 31st July 2013, About 10 years ago 4

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My partner and I are living in a part rent/part buy affordable housing 1 bed flat. Affordable housing - buy to let trap

We would like to move house so we can start a family.

We have enough money for the deposit on a new property and have been looking at bigger places to live.

Our 1 bed flat has been up for sale for almost 6 months and we have only had one viewing from someone who thought the property was at another site!

The block of flats we are in consists of 5 council rented flats and 3 part rent part buy affordable housing schemes.

A number of the tenants in the council rented flats have caused nothing but problems ever since the property was built in 2007. The police have raided neighbours flats for drugs on numerous occasions, we had 3 years of noise disturbances from one tenant who eventually was evicted, constant damage to the communal areas and people leaving unwanted furniture in hallways and outside the property.

Sadly the block of flats, we think now has a bad reputation and this is why nobody has viewed to buy.

We have tried to get permission to let the flat so we can move but because we are part of a shared ownership scheme we cannot get permission from the mortgage people as we would need to prove that we would be moving back into the property after 2 years, which we won’t be!

We have spoken to the housing association that own the other half of the property and have asked for them to buy back our share as we feel we are stuck due to all the going ons with the other tenants. Our local MP has also written to them and asked the same question, but they said they would only be willing to buy back the property if we were in danger of repossession, but we are not in that situation!

What could we do, so that we could either sell the property, obtain permission to let or have the housing association buy back our share?



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Si G

18:11 PM, 1st August 2013, About 10 years ago

Hello from my experience mixing council tenants and owner occupies is a recipe for disaster. Values fall and renters have absolutely no incentive to contribute to the development. I'd advise you to either rent it (without giving notice) or take a hit (if you can sell). Part rent part buy is a trap and the only certainty is that it will lead to another bubble. Hope you get somewhere with the situation, keep marketing for sale for now.

andrew townshend

18:13 PM, 1st August 2013, About 10 years ago

sorry to say but it would seem you are stuck, as a landlord i would avoid this sort of property like the plague.


10:34 AM, 2nd August 2013, About 10 years ago

I have advised a number of family and friends not to go the part-buy, part-rent route and the only one who did so now bitterly regrets not heeding my advice.

If it was a bank, financial advisor or insurance company that had sold the idea instead of the government, I believe there would probably be a massive wave of compensation claims by now.

Think of it logically. The mortgage element plus the rental element come to as much and sometimes more than a straightforward mortgage. So I would always argue that if you can afford to pay the rent plus mortgage then you can afford the larger mortgage. Yes, you have to save a larger deposit, which you have now done and it would have been better to simply stay with your respective families or rent the cheapest place you could until you had saved the full deposit in the first place. I apologise if this sounds patronising as hindsight is a wonderful thing and not particularly useful right now. Unfortunately, I think the real problem is our "I can't wait, I have to have it now" culture.

Struggling to save a deposit is not new. When my wife and I bought our first house there was no bank of mum and dad so we had to live like hermits, doing two jobs each & saving every penny for four years to get our deposit together. Even then we had to almost beg for a mortgage in the very early seventies as they were nothing near as easy to get as they were at the hight of the financial crisis. When we moved in we didn't even have enough money for any furniture, had no washing machine, no fridge, no phone, nothing to sit on, just a bed given to us as a wedding present. The legal fees were around 10% of the house value (less than 0.5% today), another huge cost we had to find. Talk to most people in their late fifties/early sixties and they will tell you the same. Mortgage rates were 8% and crippling to a young, working but penniless couple. IT IS NO DIFFERENT TODAY. That's worth repeating.... It is no different today.

I feel very angry and consider that you have been miss-sold the idea that a part-rent, part-buy is that first step onto the housing ladder. I'm afraid in my opinion it is not even the first rung - it is a different track altogether, a "step-stool" at the side of the ladder and only suitable for those who really should never take the commitment of a mortgage in the first place but have aspirations to do so.

What would I do now if I were you ?? Well, definitely do not default or you will destroy your credit line. I would sit down with my partner and agree a two or three year plan. I would accept whatever loss I had to accept so that I could move on. If you want to rent out fine, but beware that the sort of tenant to take the place may cost you more than you make in the long run - there are plenty of "tenant from hell" examples and unless you are very careful you could end up with one, in fact that's probably the only tenant that's likely to want to live there if it's as bad as you say. If your partner is not already expecting and it's too hard to save enough while you are in the current flat, I would consider moving back in with my parents (together of course if that is possible), dump my contract phone for a PAYG with a free phone (or even completely), take an evening bar job on top of my day one and save, save, save, save until I have made up any difference needed to buy my own FREEHOLD property. Do not buy leasehold unless you have no choice, it has a peppercorn ground rent and there are absolutely no service charges - usually found on the older, pre-1960 maisonettes (insist on seeing a copy of the lease before incurring any legal costs and check it yourself first to avoid wasting money), as the ever increasing service charges on newer ones can & will prove crippling.

If you did seek any professional advice before signing up for the current place I would also see if there is any possibility of seeking compensation, although this is doubtful, especially if the pitfalls you now face were pointed out at the time.

Clearly, I am not in favour of these so called "affordable" part-rent, part-buy schemes, but I would go one further and say that not only are they absolutely wrong for many people, they should carry a warning similar to cigarette packets
"a part-rent, part-buy property can seriously damage your long term wealth as you may find it impossible to sell your share and the seller is under no obligation to buy it back, so you could be stuck in this place forever".

It is really saying something when other landlords as above have stated they avoid these places like the plague, as do I.

I sincerely hope the advice is helpful even if it's not what you were hoping for.

Best wishes,


andrew townshend

11:12 AM, 2nd August 2013, About 10 years ago

Reply to the comment left by "r01 " at "02/08/2013 - 10:34":

the advise/comments left by r01 above are spot on !

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