What is Right to Buy?
Right to Buy is a government scheme allowing council tenants to buy their council houses at a reduced price. Around 1.5 million houses have been sold in this way since the scheme was introduced in the 1980s.
Who can buy their council house?
You may only buy your council house if:
- It is your main home;
- You have been a council tenant for more than 3 years; and
- It is self-contained (i.e. you do not share rooms with other people, such as a house share).
You can apply to buy the house jointly with someone who shares the tenancy or up to 3 family members who must have lived with you for 12 months.
What is the discount?
The amount of discount you receive depends on how long you have lived at the property, whether it’s a flat or a house and the market value of the property. You get a 35% discount if you have been a tenant between 3 and 5 years. After 5 years, the discount increases by 1% per year to a maximum of 70%.
The maximum discount from the full market value of the property in England (excluding London) is £82,800.
If the council have spent money improving your home then the discount might be reduced to account for the cost of the improvements.
How to apply
You can apply direct to the council and, if approved, they will contact you detailing the discount they are prepared to offer. If you accept the offer then you should instruct a conveyancer to deal with the legal paperwork. You will also need to apply for a mortgage, if required.
What happens if I want to sell?
Once the conveyancer has carried out the legal work, the property will be registered in your name at the Land Registry. The fact that the property was bought under the Right to Buy scheme will be noted on the legal title to protect the interest of the council if the property is sold within the first 10 years.
If you sell the property within 5 years you will have to pay back a percentage of the discount received. If you sell in the first year you must pay back all the discount. The amount you pay back depends on when you sell.
If you sell the property within 10 years you are required to offer the property back to the council for full market value at that time. If the council does not want to buy the property back you are free to sell it on the open market.
If you have any questions about purchasing your council house further information is available online at www.gov.uk/right-to-buy-buying-your-council-home or feel free to give me a call once you have agreed your discount and I’ll be happy to discuss it with you.
Katie Holmes
October 2019