To keep our council property when we can technically buy?

[HungaryForLove]

Hi all,

My partner and I are TTC and thinking about our future. Ideally, after I have a baby I only want to work maximum 2 days weekly so I can be around for our kids, and also save on childcare costs. Partner earns about £35k/year before tax/pension, and we have around £16k in savings. We wouldn’t be claiming UC, just child benefit.

We currently live in a council house that my partner grew up in — he inherited it when his mum moved abroad. It’s a 3-bedroom house. Rent is £480/month. The estate is fine, some people are bit rough around the edges but they never give us any trouble and there’s actually a nice community. I regularly walk to the local shop at night and never feel unsafe. It’s full of young families.

The alternative is buying a 3-bedroom house (we need 3 bed as want 2 DC and I often WFH), which seems to start around £160,000 here and with the 10% deposit of £16,000 our savings would go back down to £0 with no buffer for house maintenance, car issues, maternity leave etc. Also with a 30-year mortgage (we’d need 30 years to be able to afford the monthly payments) at 4.35% interest, I’d realistically need to work 4–5 days a week just to cover costs. I am currently only earning £26,000 full-time. Working so many days would mean barely seeing our kids and only taking home less than £1000 anyway after childcare, and that’s with taking into account the 30 free hours as you still end up paying hundreds a month anyway (I know this from my sister who uses our local nursery 4 days a week for her son who is soon changing to 2 days as she will pay nothing then).

If we stay in the council house, we could comfortably manage on one full-time income and one very part-time income and retain over £10,000 in savings (that would otherwise go on house deposit) to get us through maternity leaves etc, and the a portion of the money we’d otherwise spend on mortgage interest we would invest. Even considering rent going up a few percent per year, we’d still be much more comfortable.

So, AIBU for wanting to stay put in our inherited council house for now, even though we could technically afford to buy? I’m not saying we would stay forever but at least until the expensive childcare years are over, and maybe by then mortgage rates will have become more reasonable and I could go back to working full-time and we’d only be paying wrap-around care.

I do appreciate we are in a fortunate position to be even able to make this choice. Me and DP did grow up in severe poverty, I had alcoholic gambling addict parents and DP is originally from a very deprived country which his DM has moved back to and neither of us will inherit anything. Just to add context.

How are taxpayers subsidizing the property.? They are paying the rent

Do you realise that council housing is NOT subsidised by the tax payer? It’s charged at not for profit levels. Unlike private rents.

Erm… council housing is in fact subsidized. Initially through government grants used to fund the construction of new homes and to cover some operational costs. While the goal is for the housing to be self-financing through rent, the initial construction is heavily supported by taxpayer funding, and subsidies can continue to cover the difference between rent income and costs, although this practice has been reduced over time. Due to the lack of affordable council housing in this country, you are in a very privileged position to be in a council home.

You do what works for your family. That’s what everyone else would do- no matter what they say online.

I beg to differ. The government has a duty to provide social housing. Saying that it’s subsidised through grants is akin to saying that anybody accessing the NHS rather than paying for private health care is being subsidised by the tax payer. Where would you have the people who have not been afforded a decent education, or risen above a minimum wage salary live? Because ‘market rent’ is a capitalist construct. Not for profit is exactly what it says. Rents do cover the costs.

Oh do bore off.

This couple have been fortunate - they have done everything by the book and the council are happy for them to stay. Of course they should stay there while they prepare for the future.

Congrats OP and don’t question it - yes you’ve been lucky but it doesn’t mean you should not make the most of it!!

Not read the whole thread:

OP - if you want to have DC and reduce your earning power by going PT at work you need to get married to your partner. You are putting yourself in a very financially precarious position otherwise. Use £1k of your savings and get this done.

Also - on ML and whilst you are working PT (will your employer let you drop to 2 days/wk?) your DP/DH ought to pay into a private pension for you to cover the reduction in both your and your employer contributions from you working PT.

I would suggest your joint pot might not stretch to this, for two DC, if you buy a house.

Make sure your name is on the tenancy. Not just his name.

They are taxpayers and she specifically says they will not be claiming benefits. 🙄

It’s not tax payer subsidised. Councils have a ‘housing revenue account’, where the income from rents is used for repairs and maintenance and other related housing costs. As has already been explained, as a ‘not for profit’ landlord, they can pitch their rents far lower than private landlords.

I think lots more housing of this type is needed, not just for ‘the poorest’ but for working families on low to moderate incomes. If the OP and her DP take on a mortgage, and then lose their income for any reason, they would be in a far worse position than if they continue to rent. Stick it out OP, it’s the responsible choice for now.

So all the council housing built in the 50s 60s and 70s ( which was when loads built( certainly hasn't been subsided by any of today's workers has it? And the grants that " may" have be given at the time will have long ago been paid off in the 60/70 years of rent already paid on these properties

So how then are today's taxpayers subsidizing the current council tenants

Your family is exactly the kind of family that social housing was intended for @HungaryForLove. Stay there.

That’s laughable. Because you’re wrong.

How is the tax payer subsidising this ? The price of the council house will have been paid off more than once through rent.
Just because government has been too stupid to build more social housing that isn't the OPs fault.

She's right. When I was young in the 50s some of my teachers and other white collar workers lived in council housing. When DH and I got a flat in the late 60s, we had to prove we were married to get a tenancy.

Housing policy changed in the 70s and 80s prioritising the most in need. The Ken Loach film Cathy Come Home was a catalyst. Right to buy was most attractive to better off tenants, and so dwindling numbers of council estates are now much more likely to see concentrated rates of poverty and deprivation than used to be the norm.

Posted twice in error.

I’m right. Who do you think social housing was intended for?

But right to buy imo is wrong - it was built for people who need housing and there are people out there who need housing. I think social housing shouldn’t be bought at sub market rate.

I fully agree that right to buy shouldn't exist. That's irrelevant to the topic though

Couldn’t agree more but that has nothing to do with the subject of the thread.

Wow

I'd stay where you are until your DC are in school. That way you are not blocking the house away from a struggling family permanently only temporary and it gives you time to build up a bit more savings. Once your DC are at school you'd probably want to go back to work more anyway. Are the moment you need the house so don't feel bad about it.

Of course it’s fine to stay there . I’m from a council estate and my parents moved in when the estate was built and had very little money and most of the neighbours were in the same situation. As years go by this situation changes and many people do end up quite comfortably off but are happy and settled and very importantly are part of the community they live in and often contribute to. Many people would help coach a local sports team and are involved in the local community. It’s only on MN that I hear this maddness that as soon as people earn x or y they need to leave their house. It’s also because I feel many people have strange ideas about council estates.

It does, as pp have suggested the OP stay, buy the council property and later sell.