As social housing tenants, the Right to Buy scheme is open to many of you and if it’s a possibility, it’s a fantastic way of ensuring stability once you’ve found a home you love. Below is a breakdown to understanding the Right to Buy and if it might work for you.
Am I eligible?
Under the current rules, you can apply to buy your council home if:
- It’s your only, or main home
- It’s self-contained, i.e. you don’t share any rooms (including kitchen, bathroom and toilet) with people outside your household
- You’re a secure tenant (there’s a legal contract between you and the landlord)
- You’ve had a public sector landlord (e.g., a council, housing association or NHS trust) for three years (it doesn’t have to be three years in a row)
You can also make a joint application with someone who shares your tenancy, or up to three family members who’ve lived with you for the past 12 months (even if they don’t share your tenancy).
I’m a housing association tenant – what are the rules?
Most housing association tenants do not have the Right to Buy. But there are some exceptions, as well as other schemes that will allow you to purchase your home. Here, we’ll list out the possibilities:
‘Preserved’ Right to Buy
If you were a secure council tenant and were living in your home when it was transferred from your council to another landlord, like a housing association, then you may have a ‘Preserved’ Right to Buy. If that’s the case, then you can buy your home under the scheme in the same way as if you were still a council tenant. Your landlord will be able to tell you whether you have this status.
Right to Acquire
You may also be able to purchase your property at a smaller discount than Right to Buy, under another scheme called Right to Acquire. You can find more information on Right to Acquire here, or discuss with your landlord whether or not you might be eligible.
Where is Right to Buy available?
The full scheme is only available in England.
In Wales the discount available under the scheme has already been halved and Right to Buy is planned to be cut out entirely by 2021.
If you live in Scotland, the Right to Buy scheme has already been removed completely.
In Northern Ireland, secure Housing Executive and housing association tenants still have a Right to Buy, although the maximum discount you can receive is £24,000. The amount of discount you get depends on how long you’ve lived in the property and how much of the property you’re buying.
How much discount could I get?
The amount of discount you get if you go through the Right to Buy scheme depends on whether you live in a house or a flat:
If you live in a house…
You get a 35% discount if you’ve been a tenant for between 3 and 5 years. After 5 years, the discount goes up by 1% for every extra year you’ve been a tenant, up to a maximum of 70% – or £77,900 across England and £103,900 in London boroughs (whichever is lower).
If you live in a flat…
You get a 50% discount if you’ve been a tenant for between 3 and 5 years. After 5 years, the discount goes up by 2% for every extra year you’ve been a tenant, up to a maximum of 70% – or £77,900 across England and £103,900 in London boroughs (whichever is lower).
If you want to work out how much of a discount you could get, you can use the Right to Buy calculator.
I’m interested and I’m eligible – what next?
You’ll need to fill in an RTB1 application form. The form will tell you all the information you’ll need to fill it out and send to your landlord.
If your landlord agrees to sell, their offer will tell you:
- The price they think you should pay for the property and how it was worked out.
- Your discount and how it was worked out
- A description of the property and any land included in the price
- Estimates of any service charges (for a flat or maisonette) for the first five years
- Any known problems with the property’s structure
You then have 12 weeks after you get your landlord’s offer to decide and let them know. Once this time is up, your landlord will then send you a reminder, which you’ll have 28 days to reply to, or the landlord could drop your application. Don’t worry though, you can pull out of the sale and continue to rent at any time!
If you disagree with your landlord’s offer, then you need to write to them within 3 months of getting the offer and ask for an independent valuation. A district valuer from HM Revenue and Customs will then visit your property and decide how much it’s worth. After this, you have 12 weeks to accept its valuation or pull out of the sale.
My landlord is willing to sell – will I need a mortgage?
If you’ve decided you’re ready to buy, you’ll have to go through the same process of applying for a mortgage as anyone else buying a property. Before you do this, make sure you’ve considered all the costs involved. You’ll need to factor in:
- The mortgage repayments
- One-off costs, e.g. stamp duty, survey and solicitor’s fees – for a full list take a look at this helpful guide
- Potential repairs and maintenance – now that you don’t have a landlord you’ll need to do this all yourself
- General living costs (food, bills etc.)
- Service charge – If you buy a flat, you’ll probably be a leaseholder, and will have to pay a service charge to the housing association/council for maintenance of the building and surrounding area
You should also remember that if you currently receive housing benefits, becoming a homeowner will mean that you will no longer be eligible for them.
If you’ve taken everything into account and decided that you’re going to go ahead with Right to Buy, have a look here for some guidance on getting a mortgage.
We hope this helps you come a little closer to making these important decisions and we wish you the best of luck with whichever route you choose!