Right to Buy
Right to Buy - what you need to know
If you have a secure tenancy you may have the right to buy your home, under the Right to Buy scheme.
How to apply
The rules of the Right to Buy scheme are quite complex and each application has to be looked at individually. We offer free and independent advice to our tenants about the scheme, as well as help to fill in an application form.
You can also collect application forms from the Guildhall.
Who has the right to buy?
Secure tenants have the right to buy their homes. If you have an introductory or demoted tenancy you do not.
You need to have held your tenancy for 5 years to qualify.
The five years does not have to be continuous and you can add together any time you have spent as a public sector tenant. A public sector tenant is someone whose landlord is a public body such as a council, housing association or government department.
Any period spent in armed forces accommodation can count towards the five year qualifying period for Right to Buy and the qualifying period for the discount. You can also count this time if your husband/wife/civil partner was a member of the armed forces and you lived with them in this accommodation. If you currently live in armed forces accommodation you do not have the Right to Buy.
Tenants in sheltered accommodation cannot apply to buy their property as sheltered properties are ineligible for the Right to Buy Scheme. Tenants of properties that are suitable for the elderly may also be refused the Right to Buy depending on whether or not they were over the age of 60 when the property was let to them.
You cannot buy your home if your tenancy is held in connection with your job, you are a an undischarged bankrupt or if you have lost your security of tenure through a suspended possession order.
The Right to Buy is not available to people who part own their home with the Council. Your eligibility would be confirmed as part of the Right to Buy application process.
The Government has announced plans to change the minimum eligibility period from five years public sector tenancy to three. This requires a change to the law. This is expected to be in place in late 2014, subject to Parliamentary approval. The Bill’s progress can be tracked at www.parliament.uk/business/bills-and-legislation/draft-bills/
Can I buy my home if I am on benefits?
Being on benefits will not affect your legal Right to Buy, but you will need to make sure you can afford your monthly repayments. Becoming a homeowner may however affect your benefits. For example, you won’t be eligible for Housing Benefit once you become a homeowner. It is important you take time to work out all of the costs involved.
How much is my home worth?
We do not have set prices for our Council properties; every home is valued as part of the RTB process - just the same as an estate agent would come and value your home if you already owned it and wanted to sell it. You can get a rough idea of how much your home may be worth though, by looking at similar properties in your area that are currently up for sale, in either the Property Guide or on local Estate Agents' websites.
How much discount will you receive?
It depends on how long you have been a tenant. The longer you have been a tenant the more discount you will receive on the market value of your home. On 21st July 2014 the government announced to increase the maximum percentage discount for a house/bungalow to 70%, this brings it in line with the maximum percentage discount available for flats.
The maximum cash cap has also increased to £77,000.
If you are due to complete your purchase after the changes are legally in effect and you qualify for the bigger discount, the Council will automatically apply the new maximum discount and you will not need to reapply.
If you are due to complete before the changes come into effect, and the changes are potentially beneficial to you, then you will need to discuss the options with the Council. You may be able to access these changes, but it will depend on your individual circumstances.
Discounts for houses and flats are worked out differently:
House: If you live in a house (or bungalow), discounts start at 35% after 5 years' tenancy. Add 1% for each extra year that you have been a tenant, up to the maximum of 70%.
Flat: If you live in a flat (including maisonette), discounts start at 50% after 5 years' tenancy. Add 2% for each extra year that you have been a tenant, up to the maximum of 70%.
Whatever percentage you are eligible for, the discount cannot be greater than the maximum cash discount of £77,000.
For further information on eligibility and a Right to Buy calculator to help you work out the discount you could receive based on length of tenancy and average property prices for your area please visit the Government's frequently asked questions.
Future changes to the Right to Buy
From 6 april 2015 the maximum cash cap will increase annually in line with percentage change in the Customer Prices Index (CPI) published by the Statistics Board.
How much will you have to pay for your home?
The sale price will be set to compare with other houses of a similar type for sale in your area. If you disagree with the price you must put a request in writing for the the District Valuer to assess the value of your home.
Freehold and leasehold
The majority of properties are sold freehold. This means you own the land the house is built on. Flats and maisonettes are sold leasehold. For these the council continues to own the land and the building but you have the right to live there for the length of the lease.
In addition to the sale price, you need to add on the cost of any bank or building society fees, survey fees and your solicitor's fees. You will also need to arrange for buildings and contents insurance if your home is a house.
If you are a leaseholder (i.e., in the case of a flat or maisonette) the buildings insurance will be included within your service charges but you will still need contents insurance. The service charge is raised quarterly to the council to cover the cost of such things as the buildings insurance and maintenance of the building.Please remember
- Once you own your home you will be wholly responsible for the costs of maintaining it
- You will not be entitled to claim any Housing Benefit to help with the cost of your mortgage
- If you are elderly and own your home the value will be taken into account in assessing whether you need financial help with the cost of residential care
- A number of firms offer mortgages and other services to tenants who want to buy their homes. You do not have to use them.
- Buying your home is the biggest financial decision you will ever make. To make sure you make the right decision get as much information and advice as you can first.
Tenants are always advised to seek independent legal advice before committing themselves to buying their property.
Selling your property
After the property is yours you can sell it whenever you wish. If you wish to sell your property within a period of 5 years of the date you purchased it from the council, you will need to repay some of the Right to Buy discount. The amount will depend on how much you sell it for and how long you have been the owner. This also applies if you agree to transfer ownership to someone else.
Below is an example of a discount repayment calculation:
Property sold, after 3 years from the date of purchase from the Council, for the sum of £125,000
This would mean that there are two fifths of the discount repayable (i.e. two years remaining out of the five year discount period).
If for example, when the tenant purchased the property from the Council, they acquired a discount of £24,000 the amount now repayable would be calculated as follows:
£24,000 (amount of discount received)
£85,000 (original full valuation of property when purchased from the Council)
£125,000 (current e.g. sale price) x 28.23% = £35,287.50, divide this by 5 and then multiply by 2 (for the two years remaining) = £14,115. This is the amount of discount that would need to be repaid.
After 5 years you can sell without having to repay any money to the council.
However if you sell within 10 years you have to offer the property back to the Council before you you put it on the open market.