Buying housing association home - yes or no?

[Righttoacquire]

We aren’t sure whether to buy our housing association home. Lovely but cosy 2 bed house, with garden and drive. Nice area. We would get a £10k discount on house price, which we’d keep as equity if we stayed here for at least five years. Ample room for us and one DC but if or when we consider a second in the future, it’s unlikely there would be enough space.

We would be able to put down about 10 percent in total so 90% LTV. The rates are still nearly five percent for this, so we’d go from paying £650 in rent to £1100-1200 in mortgage. We can just about afford that but it would be absolute top of our borrowing power.

Should we buy it in this situation or instead attempt to buy a bigger house elsewhere that we can remain in for longer without using the scheme? The incentive to buy it I suppose is the discount and the lack of having to move immediately, while cost of living is high. Financially we’d be better off to keep renting it but I know rent is money you’ll never see again.

It’s hard to know what to do!

Financially we’d be better off to keep renting it but I know rent is money you’ll never see again.

Well, so is food, if you get my point.

Why would you deliberately make yourself worse off? I don’t understand.

True. Societal pressure to be a home owner and invest your money I suppose. We want a bigger house at some point so will need to move from here and buy.

Don't forget you will then be responsible for all repairs so you need the wiggle room to save at least a couple of hundred pounds a month for an emergency repair fund.

No. As a housing association tenant myself I think buying them and taking them off the market is immoral when there's such a lack of social housing.

Obviously I can’t predict the long-term prospects of the investment but I have several friends who have lost an awful lot of money on their houses. Then again, they needed somewhere to live!

I rent an HA home and know nothing about buying really, but I suppose you’ve done your sums on what it would cost you to move in, say, 5 years? Including all the hassles like chains and stamp duty? Would you be better off than if you invested that additional money elsewhere? Again I have no knowledge of what’s best for you but if you were mortgaged to the hilt I’d be worried that you were at the mercy of any future interest rate hikes. The political situation is so unstable right now that there just seems to be no telling what crazy things might be about to happen.

Then again, I expect that’s why you’re asking here! I’m naturally cautious; others might feel that buying wasn’t that much of a risk.

I feel the same tbh but thought I’d leave that bit aside. The fact is if it’s rtb property then someone’s going to personally benefit from society’s loss. If the OP did then I suppose she could donate her profit to the food bank or something?

Financially we’d be better off to keep renting it but I know rent is money you’ll never see again.

There is your answer.

As PP pointed out you will have to pay for repairs and there are other negatives of being a home owner e.g. if you become unemployed, not being able to move if nuisance neighbours move in, not being entitled to move if you more children.

From the sounds of it OP can actually afford to buy a non housing association property. Buying a HA to take away from someone who seriously needs it if you can afford somewhere else sits very uncomfortably with me.

Moral issues with right to buy aside, personally I think if you can afford the mortgage payments, then definitely go ahead and buy. That way every month you’re essentially “saving” towards your bigger house as with each payment you make you increase the equity in the property, and with the discount you could end up with a lovely deposit there for your next house if & when you need to move. Rent is, as you say, money you never get back.

We can but it would be a squeeze. The house we are in is rented at a discount price with the idea you can buy it after a certain length of tenancy. Think it’s quite a new scheme introduced in the last five years or so. Rent to buy. We would still get the benefit of right to acquire I believe

It's still taking away social housing. I just think it's wrong.

Putting aside the morality of it temporarily:

If you do definitely want a second child at some point then this might not be sensible.

If you want a second child next year it's really not sensible - you would be paying more money in mortgage only to move within a year.

If you don't want a second child at all then it's probably worth it, although you'd want to be pretty sure you have some emergency cash around. Interest rates are unlikely to go up from here but you never know.

So... depends on your plan.

Thank you … it’s difficult