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Original poster

FTB: stay in social housing and rent out a small property?

121 replies

CorStrewth · 23/04/2023 12:12

I know this may be contentious but I believe completely legal.l and appreciate I'd have to check Ts and Cs of my rental.

Currently have a great social house, I've been a social tenant for 17 years and through being a good tenant was able to get a better and bigger house when I needed it 8 years ago.

Now DH and I have built our careers and looking to be FTB. We would go from £500 in rent to 1k-1.5k per month. I'm toying with the idea of buying a small property I.e. 1 bed flat and renting out, not necessarily for profit but to have that asset and essentially not costing me anything, kind of like a business venture, staying in our SH until we have a good deposit for a house to live in.

Are there any reasons financially why that may not be a good option? I have two children settled in school etx so downsizing and living somewhere smaller for a little while isn't as feasible as it would have been if we'd bought before having kids.

Thanks again, great advice yesterday re: FTB in current times

OP posts:
Silentbarking · 23/04/2023 12:36

“..through being a good tenant…”. You did not get a larger house through being a good tenant, you got a larger house due to your needs changing. Did they send you a good behaviour chart complete with gold stars? (If any of this is true which is doubtful - mocking shit to stir up resentment blah blah blah).

NewNovember · 23/04/2023 12:37

GiveInToTemptation · 23/04/2023 12:21

This is why social housing needs to be means tested and people should move on once they earn above the threshold.

That's was discussed as dismissed as a stupid idea for many reasons including no aspirations and creating ghettos.

Seventhirtyanditsearly · 23/04/2023 12:38

MooseAndSquirrelLoveFlannel · 23/04/2023 12:30

Our social housing tenancies say it has to be "your sole and principle property" and I have referred cases to fraud investigators for people breaching this by owning other properties.

Yours may be different, but morally I am surprised you could think this is right. We have 10,000 people waiting for houses for my HA.

I would expect OPs tenancy to contain something like this I definitely know that it has to be your main home it may differ between LAs.

Whether OP does go onnto buy a property or just has significant savings it still seems off when so many families have neither a home or savings

Loria · 23/04/2023 12:38

Think this would be a bad and pointless idea. Pretty sure your tenancy agreement wouldn't allow it for starters. Plus you'd get hammered for tax and end up paying through the nose if you ever did buy a property of your own. Also rental returns aren't that great now for the effort involved and interest rates are decent. If you have spare cash you'd be much better off investing it. Talk your options through with an IFA.

gamerchick · 23/04/2023 12:38

Seventhirtyanditsearly · 23/04/2023 12:35

Once you have a secure tenancy (they Tony often give these types of tenancies now but there are still many people who have them) you can literally win the lottery and not be expected to move - there is no means testing they were just given as secure lifetime tenancies and most had succession rights so can in theory regardless of financial circumstances remain in the same family for a long time

Show quote history

Yes you can. Money isn't the same as owning a property

You can't own a house and live in a council house though. Not sure why the the OP thinks she can

Although I have doubts that this is for real.

Easterfunbun · 23/04/2023 12:39

Immoral. I’ve got a great social house but will be giving it up once I buy.

stealthninjamum · 23/04/2023 12:39

I’m not going to comment on the morality of it but it is hard to become a landlord. I think most buy to let mortgages would require a 25% deposit, charge an higher rate of interest, and the gov have made it harder to make a profit. You’d also need to get a property with an eco rating of c and above. I think unless you almost own the house outright it can be hard to make an annual profit.

Mamaneedsadrink · 23/04/2023 12:40

BeetrootBeetrootGhali · 23/04/2023 12:35

I’ve said it before and I’ll say it again…

I’m so glad I’m not a UK taxpayer. You guys seem to have a very fucked up system.

Agree

gamerchick · 23/04/2023 12:40

GiveInToTemptation · 23/04/2023 12:21

This is why social housing needs to be means tested and people should move on once they earn above the threshold.

SH isn't linked to benefits. Nor should it be.

Loria · 23/04/2023 12:41

Seventhirtyanditsearly · 23/04/2023 12:35

Once you have a secure tenancy (they Tony often give these types of tenancies now but there are still many people who have them) you can literally win the lottery and not be expected to move - there is no means testing they were just given as secure lifetime tenancies and most had succession rights so can in theory regardless of financial circumstances remain in the same family for a long time

Show quote history

This is true but if you won the lottery and chose to live in a council house there's something wrong with you.

Plus that's just about money not property. Buying a property breaches your tenancy agreement and you can get evicted for that breach.

Silentbarking · 23/04/2023 12:43

Goady thread. Designed to whip up resentment. How many now? Two per week.

YukoandHiro · 23/04/2023 12:43
  1. check your terms - its rare these days not a have a clause that would count you out.
  2. almost certainly unless you have a huge income (in which case why did you buy before?) you can't afford the costs of being a landlord and even the purchase eg high stamp duty (it's much higher if you're not buying your sole personal residence)
Easterfunbun · 23/04/2023 12:44

It’s definitely illegal to do this under my housing association.

YukoandHiro · 23/04/2023 12:45

@Seventhirtyanditsearly is right but there are good arguments for this - which is that putting in clauses actively discouraged social tenants from financial personal improvement because their QOL will almost certainly decrease (due to our fucked up housing market) which is overall far more expensive to the taxpayer

Lifeisgood1 · 23/04/2023 12:46

As.someone desperately needing social housing to support 2 disabled children I thinking this is fucking disgusted.

Loria · 23/04/2023 12:47

Council tenants across the country are winning lotteries and buying houses while occupying social housing and that is why families are living in hostels. Nothing to do with thirty years of failed housing policies designed to create a precariat class and then hammer them into the ground. It's all these lottery winners and BTL tenants with massive jobs and massive portfolios.

frothfrothfrothfrothfroth

Tulipvase · 23/04/2023 12:47

I’m not sure they have the wherewithal to know but in my area I don’t think you could do this.

A long time ago we lived and owned a 2 bed flat and would have been considered overcrowded and we were allowed to be on the council house waiting list (very far down it) but several years ago they changed the rules and homeowners were no longer allowed on the list at all. Completely understandable too.

I can’t see how this would be different.

Silentbarking · 23/04/2023 12:48

@Lifeisgood1 the whole point of this goady thread is to get comments like yours. Ffs. Just see through the bollocks.

FishChipsMushyPeas · 23/04/2023 12:53

Lifeisgood1 · 23/04/2023 12:46

As.someone desperately needing social housing to support 2 disabled children I thinking this is fucking disgusted.

Don't rise to it mate, this saddo clearly has nothing better to do.

DeathMetalMum · 23/04/2023 12:53

I wouldn't buy a smaller property to 'invest'. Surely you would just be better off saving what you have now for a larger deposit on a property a similar size to what you have now.

gogohmm · 23/04/2023 12:54

I'd be very surprised if you didn't have a clause about having to declare any properties you own including change of circumstances. Eg my friend inherited a dilapidated collage in Scotland (we lived in the midlands) and she nearly lost her housing association house, it took a solicitor and a kindly housing officer at the council to sort out the legal situation she didn't even ask to be in (it was a great aunt who left it to her, she wasn't expecting it).

In her case she had to prove it wasn't fit for habitation and that it would be detrimental to her family to move to the property if it was renovated (not that she had the funds to do so. Choosing to purchase a flat that's too small for your needs could be considered deprivation of assets

GGBOY · 23/04/2023 12:58

Some of these threads are unbelievable lately .

seekingasimplelife · 23/04/2023 13:10

I would be wary of taking this route for two reasons…
The terms of your tenancy might well make this a viable and attractive option now, but government regulations are always open to change and usually become more restrictive. You might find yourself having to leave your HA home if you have a second dwelling in the future.
If you like where you live - and the rent is cheap, I would weigh up whether it’s worth the risk of this happening.

Legislation around buy to let properties is becoming very onerous and expensive, adding considerable costs - both now and potentially much greater costs into the future (being unable to sell if you can’t meet the energy efficiency requirements for instance).

If you wanted to invest in property I would look to a stocks and shares index tracker portfolio with a property bias. Less hassle, less potential costs and less risk of losing your HA home. And of course much more liquidity.

JustforAlice · 23/04/2023 13:11

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seekingasimplelife · 23/04/2023 13:26

Following on from my previous post… if you are happy with the potential costs of ownership, but it is the worry about losing your HA home, you could consider the feasibility of incorporating a buy to let property within a limited company.
Technically (and legally), the ownership of the buy to let would belong to the business and not to you personally.

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