Right to Buy
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Everything You Need to Know About the Right to Buy Scheme
What exactly is the Right to Buy Scheme and how does it work?
The Right to Buy scheme allows most council tenants to buy their home with a discount. The discount depends on how many years they have been a tenant for and generally, if you have a public sector landlord like a Council, Housing Association or NHS trust, you should be entitled to buy.
Who qualifies for Right to Buy and is it available throughout the UK?
Generally it’s available to most public sector tenants with a secured tenancy and some with an assured tenancy. The government has recently changed this, so it’s important to always check with your landlord to see whether it affects you.
The full scheme is now only available in England, it ended in Wales in January 2019 and was abolished by Scotland.
How do I know if I’m eligible for Right to Buy?
If the rental is your only or main home and it’s self-contained, which means you can’t walk into someone else’s part of the property you are a secure tenant. Sometimes assured tenancies can also get what’s known as preserved Right to Buy or preserved tenancy. Always best to check with your landlord or on the government website, as the information is easy to follow.
What is the process of Right to Buy and how do you apply?
If you’ve been a tenant for three years or more, you will be able to apply for the Right to Buy Scheme. To begin the process, contact your landlord (Council or Housing Association) and they will let you know whether you’re able to buy. If you are, they will send out a form.
You can also download and print off a Right to Buy application form the government website. The landlord will then complete the next step, which will be assessing that application.
Can a Mortgage Broker like Total Home Loans provide advice?
Yes, we can help people who want to ascertain if they’re able to get a mortgage and whether the amount they will be entitled to will be enough to buy their property. We have twenty years of experience in dealing with this type of mortgage, so will be best placed to help you.
There’s no cost and no obligation to contact us, we let you know whether you’re likely to get a mortgage and then we’ll help you with the application, if needed. You can stop at any time throughout the process with no cost yourself.
What’s the discount if you live in a house or if you live in a flat?
The maximum discounts vary depending on whether you live in or outside of London. Regardless of whether the property is a house or flat, the maximum discount outside of London is £84,600. In London, it’s £112,899.
If you’ve had a house tendency for three to five years, you will be able to get a 35% discount, and for every year that you’ve had a tendency in addition to that, you’ll get an extra 1% discount, up to a maximum of 70%. If you have a flat tenancy for three to five years, it will be 50% discount, and for every additional year, you would get an extra 2% up to a maximum of 70%.
The maximum can vary from year to year, depending on the budget for that financial year, so it’s always worth checking with your broker or on the government website to see what the current discount available is.
How much discount do you get buying a council house?
If you buy a council house after three to five years, your discount is 35% of the price that the council attaches to that property. During the process the council will do a valuation of your property based on what sold recently around your area, which will help them to calculate what that 35% discount equates to.
If you happen to have ten years tenancy, your discount rises to 50%. It all depends on how many years you have lived in a property for and the three years don’t have to be in a row. For instance, if you’ve had council tenancy and then lived privately or with family members for a time, then returned to council housing, any years spent in council accommodation count towards your discount.
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Can I let my Right to Buy property?
You potentially can, but you must gain consent from the council first. The council don’t generally decline people if they’ve got a valid reason, but you’re buying that property to live in as your main home, so that should be your first intention. If unexpected situations arise, it’s certainly a possibility, however.
Can the council refuse my Right to Buy?
Yes, the council can refuse the Right to Buy if there is reason for doing so. It may be that your tenancy isn’t the correct type or you may have rent arrears. You do have the right to appeal, however, and they will give you the reason as to why they will refuse your Right to Buy. You do also have the right to get independent people to carry out an appeal for you.
What happens if your landlord agrees to sell and what’s a landlord’s offer?
When the council has done a valuation of your property, it can be at least eight weeks before you get the offer back. This is known as a landlord’s offer, also called a Section 125. In that document, the value of your property and how they worked out that valuation is listed.
The agreed discount and how they work that out will also be listed and finally what price you can buy the property for. It will also give you the information regarding the time that you have to accept this offer. You have the ability to look at the offer, decide if the valuation is too high and appeal to the district valuer, if you do.
The council will then send out an independent valuer to come and revalue the property and as a double check for you. You don’t have to proceed with the offer if you change your mind or think it’s too expensive. You can reapply as many times in the future as you deem to. So don’t be pressured into buying a property or take that offer on if it’s not the right timing or price for you. A broker will be able to give you advice on this and there’s no cost from the council.
What’s Right to Acquire and how does it differ from Right to Buy?
The Right to Acquire is when you’re not a secure tenant, generally, these are for Housing Association properties. What it means is that they will give you a lower discount, based on the fact that you’re not a secure tenant. The maximum discount available in the UK currently is £16,000 in London and up to £12,000 discount outside London. It’s the same as the Right to Buy Scheme in the way that it’s set up, but with a much smaller discount available.
Always check with your landlord as to which scheme that you’re able to get and discuss it with your broker.
What happens if delays occur within the process?
There regularly are delays, as people are dealing with the council and council solicitors all the way through. They have to make sure that the land space that you’re buying is correct as the property won’t have been sold before.
If there is a delay, you may be able to claim compensation from the council and they will reduce the price you’re buying the property for to account for that delay. There’s a form that you can use to apply for compensation for any delay, if you feel that the process has taken too long.
It should take about three months from start to finish, for you to apply and then to have your offer and be in a position to buy your property from the council. But that can be extended to four or five months depending on the area in and how busy that particular council is.
Throughout the pandemic, have there been longer delays?
Most definitely. The councill process is the same as any other and has had a lot of people working from home or only using partial staff, so there have been delays. I think they’re back to full working hours now, but there may be a catch up process.
Ensure you are not charged for a broker
There is no cost to the entire process and no one should be charging you any money to do this upfront. There may be a charge on the mortgage side later on from the council, but brokers should not be charging people to help them with the Right to Buy documentation.
A trustworthy broker will help you through this initial period, guide you through the process to get the price from the council and then help you to make your decision on whether you want to buy or not.
We’re happy to take any enquiries from people and we’ll give information and advice where we can. There’s no obligation and no upfront cost whatsoever, we’re here to help.
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