Right to Buy explained
Right to Buy government scheme allows you to buy the council house you are currently renting at a discounted rate. This article will tell you everything you need to know about Right to Buy, what the eligibility criteria are, what to watch out for, and how to apply for Right to Buy.
What is Right to Buy scheme?
If you are a tenant of a council home or a housing association, this scheme will allow you to buy the property with a considerable discount.
What is the maximum discount offered?
Discounts vary region wise and are as follows:
- For properties in London, it can be up to £100,000
- For the rest of England, it is £75,000.
- For Wales, £16,000.
- For Northern Ireland, £24,000.
The exact discount you will get depends on how long you have been a tenant with a public sector landlord, whether you are living in a flat or a house, and the value of the home.
You can use this calculator to see how much discount you will get.
What is the eligibility criteria for Right to Buy?
If you tick the following boxes, you are likely to be eligible.
- The council house must be your only home.
- You must be council tenant or were one when your home was sold to your current landlord.
- Your home is not sheltered or one which is suitable for elderly or disabled people.
- You do not have legal debt problems.
- You have no County Court Judgment against you.
- Your council house is not due to be demolished.
Should you go for Right to Buy?
It would be best to think about the following aspects before deciding that you want to buy your council house through Right to Buy.
Will you be able to afford it?
Owning a home carries a particular risk. Our articles on which kind of mortgage you should get, mortgages for low credit rating and conveyancing cost will help you understand some of the risks associated with being a homeowner.
The hidden costs
You will have to pay on-going maintenance costs. Further, you may have to contribute to any works the council decides to do in the shared spaces. Our article on leaseholds and freeholds will help you understand what kind of property is best for you.
Selling you home
You will have to pay back the discount if you sell your home within the first 5 years of buying it.
If you want to sell your home within the first 10 years, you must first offer it to the old landlord or another social landlord in your area.
Further, if you sell your home within the first year, you will have to pay back all of the discount. You should also note that you will have to pay the percentage of the discount you got from the sale price.
If you want to sell after the first year, the amount you have to pay back reduced:
- Second-year – 80% of the discount
- Third-year – 60% of the discount
- Fourth-year – 40% of the discount
- Firth year – 20% of the discount
How to apply for Right to Buy?
- You have first to fill out this form.
- Send the filled out form to your landlord.
- If the landlord agrees, they will send you an offer. They will have 8 weeks to agree if the property is freehold. If the property is a leasehold, the landlord will have 12 weeks.
The offer will include the amount the landlord thinks you should pay and how he has reached that figure. Further, it will include a description of the property and any land which is included. It will also give an estimate of any service charges in the next 5 years as well as details of any known problems in the property’s structure.
You will have 12 weeks to accept the offer. If you come to a disagreement with the landlord, you will have to write to your landlord within 3 months and ask for an independent valuation.
If you wish to accept the offer, you will have to arrange for a mortgage and then instruct a conveyancer.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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