Government Right to Buy Scheme
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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.
The Government has become increasingly concerned about impact of the “right to buy” scheme on the shortfall of affordable housing and so there changes to the rules covering the right to buy scheme have been effected. However, the Government has confirmed that it is committed in principle to tenants being able to buy their council homes under the council right to buy scheme.
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.
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.
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.
If you require information on right to buy mortgage deals use our specialist service.
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.
It is imperative that specialist advice be sought when considering buying your council home, for example, from a solicitor experienced in the pitfalls of right to buy. You may also wish to speak to the Citizens Advice Bureau initially.
For further information on right to buy, click on the link to go to the Your Right to Buy Your Home Guide issued by the Department of the Deputy Prime Minister.
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