Council Right To Buy
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Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term. Early redemption charges may apply.
As a council tenant, you may have the “right to buy” your council home and this right can also extend to tenants of other social housing schemes, for example housing associations. The right to buy scheme enables secure tenants currently living in council housing and assured tenants of housing associations the option to purchase their home at a price lower than the full market value. The amount of the discount you will receive depends upon the length of time that you have been a tenant.
The Government has become increasingly worried about the shortfall of affordable housing and so there have been significant changes to the rules covering the right to buy scheme, culminating in the Housing Act 2004.
The right to buy is available to all secure tenants who signed their agreement before 18 January 2005 and who have lived in the property for at least two years. If you are a tenant whose agreement was signed after this date, you need to live in your home for at least five years before you can buy it.
There are certain exceptions to the types of home that can be bought under the right to buy scheme and these mainly relate to sheltered housing, housing for the elderly, temporary accommodation and tied housing.
The right to buy scheme gives you, as tenant, the opportunity to purchase your home at a discount with the size of the discount being dependent upon the length of time you have been a tenant. This discount is subject to maximum limits depending upon the area in which you live. As an example, the maximum discount in Wales and most areas of London is £16,000 whereas the maximum discount in the North West and West Midlands is £26,000.
If you have been a tenant for more than two years, your discount starts at 32% for houses and 44% for flats and increases by 1% for each additional year that you have been a tenant up to a maximum of 60%. If you are buying a flat, you are eligible for an additional 2% per year to take you up to the maximum of 70% discount. However, this is subject to a maximum overall discount dependent upon the area in which you live.
If you must have been a tenant for five years before you can exercise your right to buy, your introductory discount increases to 35% for houses and 50% for flats. Again, these are subject to the overall maximum discounts dependent upon the area in which you live.
The qualifying period for the discount can be spent in different homes and with different public sector landlords.
There are a number of restrictions associated with the right to buy scheme which do not normally apply to houses in the private sector, for example, if you sell your house within a certain period you may be liable to repay some or all of the discount that you originally received or you may be required to sell your house to someone who has been living and working in the area for at least three years.
Who has the right to buy?
Under the Government Right to Buy Scheme, you have the option of buying your Council 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. The level of discount will be determined by a range of factors including length of time you have been a tenant, and the council who currently owns your home.
The scheme is for tenants of local authorities and those assured tenants of Registered Social Landlords who previously held secure tenancies with local authorities. If your secure tenancy was in existence before 18 January 2005, or you were a public sector tenant before 18 January 2005 (and you have been a public sector tenant continuously since that time), you do not have the Right to Buy until you have spent at least 2 years as a public sector tenant. A public sector tenant is a tenant whose landlord is either a 'Right to Buy landlord'; or one of the public bodies listed under 'Other public bodies'. For anyone else, you do not have the Right to Buy until you have spent at least 5 years as a public sector tenant.
You will only be able to purchase under the scheme if your house or flat is your only home and is self-contained. You cannot buy your home if a court makes a possession order which says that you must leave your home. Neither can you buy your home if you are an undischarged bankrupt, have a bankruptcy petition pending against you, or have made an arrangement with creditors (people you owe money to) and you still owe them money.
You may be able to exercise the Right to Buy jointly with members of your family who have lived with you for the past 12 months, or with someone who is a joint tenant with you. Any land let together with your home (for example, gardens and garages) will usually be treated as part of your home.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The above mortgage products highlighted on this website are available directly through lenders who will be able to provide further information about the product you are interested in. If you are unsure about what mortgage product is suitable for you, we suggest you speak to an independent mortgage broker