Right to Buy
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Right to Buy Scheme
Gary Richardson talks all about the Right to Buy Scheme.
What is the Right to Buy scheme and how does it work?
It’s a government scheme that helps council tenants, as well as some housing association tenants in England, to buy their Council homes. Generally, they give you quite a significant discount off the market value of the property, depending on how many years you’ve lived there.
Who qualifies for the Right to Buy scheme?
Anybody who’s been renting from the Council for more than three years is entitled to apply for a Right to Buy. It doesn’t have to be three years in a row. It could be an accumulation over time.
What’s the process if I do qualify for Right to Buy?
The first thing to do is either go to the council directly, or online to get the Right to Buy application form, which is known as RTB1. You need to complete and send the form to the council, and once they approve your application, they will value your home and send you an offer at the price that you can buy the property for.
Can Mortgage Brokers like The Mortgage Centre help with the application process?
We can help people to actually fill the form in, and explain how it works. At this point, presumably you would need to get a mortgage, too, so we can give you the prices of the mortgage.
Ordinarily with a mortgage application, you need to provide a deposit, but generally the discount that you get from the council will provide a sufficient deposit for lenders, so you’re unlikely to need to provide additional money.
What is the discount?
For a house
The maximum discount you can get is £84,200, and that depends on a sliding scale. If you live in a house for up to five years, you get a 35% discount, and after five years you get an additional 1% for every extra year that you’ve been a tenant.
For a flat
If you’ve lived in a flat for between three and five years, you get a 50% discount of the value of the property, and an additional 2% discount for every year you’ve been a tenant beyond five years. The maximum discount is also £84,200.
Speak To An Expert
We’re able to tap into our local knowledge to guide you through your house purchase in your chosen area.
Can I let my Right to Buy property?
There are no restrictions on renting the property as far as the council is concerned, but it’s been done so frequently, and had a lot of bad media attention, so the government may revise this in the future.
You’ve also got to consider that the mortgage lender may not allow you to rent without their consent. Again, we can guide you to the lenders that do allow consent, and it changes things slightly, but it can be worked around.
Can the Council refuse my Right to Buy application?
Yes, it’s unusual that they would refuse it, but there are some circumstances where they will. There are some households that aren’t allowed, such as if you live in sheltered council housing or a home that has been adapted for disabled or the elderly. Some people can be turned down if they have an anti-social behaviour order.
Are there other options if you are refused by the council?
Yes, you can always appeal. You have 56 days after you’ve been refused to appeal to the council property tribunal.
What does Right to Acquire mean?
It’s very similar to a Right to Buy, but Right to Buy is for council tenants, and if you rent from a housing association, it’s called Right to Acquire. The discount isn’t as generous and the maximum is £16,000.
What happens if there are delays?
Generally you have twelve months to complete once you’re sent the offer from the council. It’s a little slow, because obviously buying a house takes three or four months. Generally it probably takes seven months in total.
If after twelve months the mortgage has not been completed due to unforeseen circumstances, you can always apply again. If you do have to reapply, the process should be much quicker the second time around because your mortgage will already be sorted out.
One of the few things that you just have to bear in mind is to make sure that you keep the property for five years before you sell it, because if you sell it before five years pass, you need to return part of the discount back.
Your property may be repossessed if you do not keep up with your mortgage repayments.
There may be a fee for mortgage advice, however the precise amount will depend on your circumstances. If a fee is charge, a typical fee is £495.
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