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Council Right to Buy

Under the Right to Buy scheme, if you are a council tenant you may be able to buy your rented home at a price lower than the full market value. This is because the length of time you have spent as a tenant entitles you to a discount.

If you were a secure tenant or a public sector tenant prior to 18/1/05, you must have been a public sector tenant for at least 2 years. If you live in a house, your discount will be between 32% and 60%. If you live in a flat, your discount will be between 44% and 70%. In the North East there is however a maximum discount of £22000. 

You probably have the Right to Buy if you are a secure tenant of a council, a non charitable housing association or a housing action trust

If you have acquired a 'Right to Buy' your home at a discount, we can help you with a mortgage to make your property your own.

You may also want to take the opportunity to raise extra cash which you could use for home improvements.

The Right to Buy process can be complicated.  Alan Dunn Independent Mortgage Adviser can help you through this procedure with his special Right to Buy support scheme. As well as finding the best mortgage for your right to buy property purchase, we can help you through the maze and put you in touch with solicitors and surveyors to make the process much simpler and help you decide if its worth while to purchase at all.  Click here to contact us for more information.

Selling the home after purchasing it under the Right to Buy - You may sell your home whenever you like. But during the first year, all of the discount will have to be repaid; during the second year, two thirds must be repaid; during the third year, one third must be repaid.  After three years, you can sell without repaying any discount. But if you live in the country, you may only be able to resell to the council or to a person who lives or works locally.

The Right to Buy Process

• Obtain a RTB1 form from your landlord

• Fill in the form carefully, it will decide whether you have the right to buy and how much discount you would get.

• Return the form to your Landlord and get a receipt. Keep a copy of your form.

• The Landlord will give you a RTB2 form within four weeks if you have been a tenant for more than two years.  This tells you whether you have a right to buy.

• Within another eight weeks the Landlord will send you a separate offer notice (Section 125 notice) which tells you the price you have to pay and the terms and conditions of the sale. (if the home is a flat or maisonette, or a leasehold house a twelve week period applies.)  The Section 125 notice tells you about the property you have applied to buy, the price the landlord thinks you should pay for it, give you estimates of service costs or improvements costs you will have to pay if you buy your home, describe any structural defects the landlord is aware about and tell you about the terms and conditions that the landlord thinks should apply to the sale.

• If you think the landlord has overvalued the property you have a right to obtain an independent valuation from the District Valuer.  The valuation given by the District Valuer would then be the price that you would have to accept if you went ahead with the purchase - even if the valuation is higher than the landlords valuation.

• Before you finally decide to buy, you should consider getting an independent survey from a qualified surveyor.  It may uncover any structural problems that have not been identified.

• You should get legal advice before deciding whether to buy, particularly if you have worries about the terms of the sale.  You should always ask how much it will cost before you employ a solicitor or licensed conveyancer.

• Then it's decision time! you must choose whether to

1. Buy your home outright for the full right to buy price, less any discount for which you are eligible;
2. Apply to buy on rent to mortgage terms, that is, only buy a share in the property, you could by the rest later. (see below)
3. Forget about buying, withdraw your application, and carry on paying rent.

• You must then tell your landlord in writing of your decision within twelve weeks of receiving your Section 125 notice. If you have asked to have your house valued by the District Valuer, you must tell your landlord what you want to do within twelve weeks of getting the valuation.

• This would be the point where you should apply for a mortgage, click here to receive a free no obligation quote to see if you could borrow the money you need to purchase your council home.  Even if you have not yet started the Right to Buy process you can still receive a quote in preparation for your Right to Buy application.

• Now, if you are happy with the price and conditions of sale and you have the money in place you are ready to go ahead and buy. You will need to tell your landlord that you are ready, and ask your solicitor for advice on the legal documents and making your payment. It may take a couple of months before you become the owner of your home.

The above shows briefly the steps that need to be taken in buying your rented home.  You can find out detailed information from the Office of the Deputy Prime Ministers Web Site  at http://www.odpm.gov.uk/stellent/groups/odpm_housing/documents/divisionhomepage/033488.hcsp

The Right to Buy process can be complicated.  Alan Dunn Independent Mortgage Adviser can help you through this procedure with his special Right to Buy support scheme.  Click here to contact us for more information.

Other terms used in Right to Buy

Rent to Mortgage - If you want to buy your council home but can't afford to pay for it all at once, Rent to Mortgage lets you pay for it by instalments. To start with, you pay a lump sum that is less than the right to buy price (i.e., the market value less your discount). Your landlord retains a share in the property and you can buy his share when you can afford it. The scheme is called 'Rent to Mortgage' because if (like most people) you pay your initial lump sum by getting a mortgage, your mortgage repayments will be about the same as you were paying in rent.

Preserved Right to Buy - If you are a secure tenant of a local authority, and your home is transferred to a Registered Social Landlord (for example, a housing association), you may still have the Right to Buy, although on slightly different terms.

A leaseholder - If you buy a house you will usually buy the freehold. This means you will be the outright owner. If you buy a flat, you will become a leaseholder. Normally, this means that you will be responsible for the interior of your home whilst your landlord will be responsible for looking after the structure and the exterior of the block. He will ask you to pay for major repair and improvement works, through service charges. These can be high - sometimes as much as several hundred pounds each year, or even more if your block needs major repairs.

The Right to Buy process can be complicated.  Alan Dunn Independent Mortgage Adviser can help you through this procedure with his special Right to Buy support scheme.  Click here to contact us for more information.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Alan Dunn, Independent Mortgage Adviser, is an Appointed Representative of Mortgage Support Network Ltd, Regent House, 16 West Walk, Leicester LE1 7NA, which is authorised and regulated by the Financial Services Authority. Mortgage Support Network’s FSA Register number is 301681.
Mortgage Support Network’s permitted business is advising on and arranging mortgages and general insurance contracts.

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Last modified: 11/03/06