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Right to Buy Scheme

Right to Buy is a scheme which allows existing tenants of public-sector homes in England to buy the property they currently rent, at a price discounted below the market value. Right to Buy has existed in one form or another for decades, and enjoyed particular popularity in the 1980s, with over a million council houses sold to tenants. While changes in government policy reduced discounts and changed who could make use of Right to Buy, more recent changes to the scheme in 2015 have made Right to Buy both more attractive, and more widely available to public-sector tenants in England.

The recent changes extend the scheme to make it available to housing association as well as council tenants (though at the time of writing this is still in its early stages, being rolled out under a Voluntary Right to Buy pilot scheme).

The government has also reduced the qualifying tenancy period (you now only need to have been a public-sector tenant for 3 years, rather than the previous 5) and increased the maximum Right to Buy discount available – it is now £78,600 (or £104,900 in London), increasing in subsequent years in line with the Consumer Price Index (CPI).

Why should you buy your council home?

If you qualify for a discount you will be able to buy your council house with a discount off the open market value. This is the obvious reason for buying your home. If you don’t have the cash to make the purchase, you will probably need a mortgage. Many lenders will allow you to borrow the full purchase price, so no deposit is required. You will pay a mortgage payment rather than rent to the council. You may also be able to borrow additional funds for approved home improvements.

Do you Qualify?

By law most council tenants have the right to buy their council house or flat. To qualify for the right to buy you need to:

  • Have been a tenant for at least three years
  • The council property you want to buy should be your only or main home

If you qualify, you can buy your home jointly with up to three adults – as long as they have lived with you for at least a year and it is their only or main home.

When you buy a flat from the council you buy a leasehold interest in your home. The council continues to own the freehold.

Discounts

The maximum discount off the open market value of a property is 70% for a flat or house. The minimum discount is 50% for a flat and 35% for a house. The actual discount depends on how long you have been a tenant and is currently limited to a maximum of £80,900 in the North West.

Your responsibilities after the purchase

If you buy your home you are responsible for all its maintenance. If you buy a flat they will continue to carry out certain maintenance tasks and will charge you an annual service charge. Your rights and obligations – and those of the council – should be fully explained to you by your solicitor at the time of purchase. 

Service charges for flats and maisonettes are payable annually, it is important that you consider these on-going costs before committing to the purchase.

Please note – As soon as you apply to buy your home you will not be entitled to routine repairs or improvements (except for work required by law and to keep it weather-tight). Your home will be excluded from any planned modernisation works such as new windows etc.

Selling your home after the Right to Buy Purchase

If you apply for the Right to Buy (from 18 January 2005) and then sell your home within one year of buying it, you will have to repay the entire percentage discount you received.

If you sell your home in the second year you will have to repay four fifths; if you sell in the third year you pay back three fifths. If you sell in the fourth year you will pay back two fifths and if you sell in the fifth year you pay back one fifth. After five years you won’t have to pay back any of the discount. The amount of discount to be repaid will be a percentage of the re–sale value.

Maximum discount correct as of January 2018

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Please note that some mortgages such as commercial BTLs are not regulated by the FCA.

Contact Us For Full Details
  • 0800 035 2989
  • info@truecostmortgages.co.uk
  • True Cost Mortgages, 3rd Floor, 1 Mann Island, Liverpool, L3 1BP
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We will provide you with a free initial consultation and we will always explain exactly what you will be charged before you choose to proceed with an application. Our professional fee charged is £349 which is payable upon receipt of your mortgage offer. We will also be paid commission from the lender.

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Please Note think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Please note that some mortgages such as commercial BTLs are not regulated by the FCA.

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