Can I Buy my Council House? Right to Buy Explained
Updated: August 2024
Are you a council tenant considering homeownership? The Right to Buy scheme could be your path to homeownership. Our expert article covers everything you need to know including key information such as:
- Substantial discounts of up to 70% off your council home's market value
- The chance to buy the home you're already living in, often without a deposit
- Potential to own a valuable asset, with discounts of up to £136,400 in London
What is the Right to Buy Scheme?
The Right to Buy scheme is a government initiative that allows eligible council tenants in England to purchase their rented home at a discounted price.
This program offers tenants significant discounts off the market value of their property, with the exact amount depending on factors such as length of tenancy and property type. The scheme aims to help public sector tenants become homeowners, potentially saving them substantial amounts on their property purchase.
Should you Buy your Council House?
Many council and housing association tenants can jump from renting to homeownership through the Government’s Right to Buy scheme.
For those who are renting and saving as tenants to buy their council home through the scheme, it is a great way to invest by purchasing their home with a good discount on its market value.
Be sure to check all details with your landlord before you start your Right to Buy application because you may still qualify to buy your home through a Preserved Right to Buy.
Can I Apply to Purchase my Council House?
If you have spoken with your landlord and found that you can apply for the Right to Buy your council home, the first step is to check that you are eligible under the Right to Buy scheme. The property must be your only or main home. Your home must be self-contained, and you must be a secure tenant. In addition, you must have had a Council, Housing Association, or NHS Trust landlord for at least three years.
Preserved Right to Buy
There are specific conditions that may affect your eligibility, such as the "Preserved Right to Buy" for tenants of transferred properties. If your home was sold by the council to another landlord while you were living in it, you may still be eligible to buy your home under the "Preserved Right to Buy" scheme. This scheme allows tenants of housing associations or other private sector landlords to have the same rights to buy their homes as they would have had if they were still council tenants.
Eligibility Details
Your council, housing association, or NHS Trust landlord could also be referred to as a ‘Public Sector’ landlord in the application. It is important to note that the required three-year tenancy does not have to have been for three consecutive years. The qualifying period can include time spent in different homes and with different landlords, provided it was a public sector tenancy. You may also be able to count a period when your spouse or civil partner was a public sector tenant. If you lived with your parents after the age of 16 and later became the tenant of the same house or flat, that time can also be counted towards your eligibility.
Key points to note:
- The required three-year tenancy does not have to be consecutive.
- Time spent with different public sector landlords counts towards eligibility.
- Time spent as a tenant by your spouse or civil partner may also count.
- Time living with your parents after age 16, if you later became the tenant of the same home, can be included.
These additional conditions ensure that more tenants have the opportunity to benefit from the Right to Buy scheme, even if their living situations have changed over time.
How do I Claim a 'Right to Buy' Discount
If you are eligible for a Right to Buy discount on the price for your main home, it's worked out by taking into account how long you’ve been a tenant with a public sector landlord, the type of property you’re buying (house or flat), and the current market value of your home.
You can work it out for yourself with a Right to Buy Calculator, which indicates the discount you could get with the Right to Buy scheme. If, for example, you have lived in your home as a council or housing association tenant for three to five years, you could qualify for a 35% discount on the price for a house, or a 50% discount for a flat.
Once you have been a council tenant for more than five years, you can qualify to buy with an additional discount that increases by an extra 1% discount every year (2% for flats) to a maximum of 70% or a maximum cash discount (whichever is lower) of £102,400 across England and £136,400 in the London boroughs.
If you are making a shared application as tenants, the discount will be linked to the person who has been a public sector tenant for the most years. In all cases, the maximum percentage discount is 70%.
- The cap on the discount is linked to inflation in line with the Consumer Price Index (CPI), but the maximum of 70% discount will always be whichever is lower.
- You may only be eligible for a smaller discount if you have used the Right to Buy Scheme in the past.
- If you decide to sell your home within five years, you will have to repay part of the discount.
- Your discount could be less if your landlord has spent money on buying or improving your home. There are several conditions to check for this, such as if your landlord has spent more money than the property is now worth or if significant improvements were made recently
Right to Buy Breakdown: How Much Could You Save?
| Aspect | Jane (House) 🏠 | John (London Flat) 🏢 |
|---|---|---|
| Years as tenant | 10 years | 15 years |
| Property value | £150,000 | £300,000 |
| Initial discount | 35% (3-5 years) | 50% (3-5 years) |
| Additional discount | 5% (1% x 5 years) | 20% (2% x 10 years) |
| Total discount % | 40% | 70% |
| Calculated discount (£) | £60,000 | £210,000 |
| Discount cap applied | No | Yes (£136,400) |
| Final discount | £60,000 | £136,400 |
| Price paid | £90,000 | £163,600 |
| Total savings | £60,000 | £136,400 |
Key Takeaways:
- Longer tenancy leads to higher discounts.
- Flats have a higher initial discount rate.
- London's higher property values trigger the discount cap.
- Both scenarios offer significant savings compared to market prices.
Financial Tips for Right to Buy Success
Buying your council house is a significant financial commitment, and it's crucial to fully understand the financial implications before proceeding. Here are some detailed financial advice points to help you make an informed decision:
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Consult a Mortgage Advisor:
- Speak with a mortgage advisor to explore your financing options. They can help you understand different mortgage products available, interest rates, and the overall affordability based on your financial situation.
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Use a Mortgage Calculator:
- Utilise online mortgage calculators to estimate your monthly repayments. This tool will help you understand what you can afford and plan your budget accordingly.
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Understand Additional Costs:
- Remember that buying a home comes with additional costs beyond the mortgage. These include:
- Solicitor Fees: Legal services for the transfer of ownership.
- Survey Fees: A survey to assess the condition of the property.
- Stamp Duty: A tax on property purchases above a certain value.
- Land Registry Fees: Charges for registering your ownership.
- Remember that buying a home comes with additional costs beyond the mortgage. These include:
-
Budget for Repairs and Maintenance:
- As a homeowner, you will be responsible for all repairs and maintenance. It's wise to set aside a portion of your budget for these unexpected expenses.
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Insurance:
- Consider taking out home insurance to protect your property and its contents. Mortgage lenders often require this as a condition of the loan.
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Plan for the Future:
- Ensure that your financial plans are sustainable in the long term. Think about potential changes in your circumstances, such as interest rate rises or changes in your income.
-
Check for Financial Assistance:
- Look into government schemes and financial assistance programs that may be available to help first-time buyers.
Expert Insight: Paul Gibbens on Right to Buy
Paul Gibbens, our property expert, shares his perspective on the Right to Buy scheme:
"Right to Buy offers council tenants a unique path to homeownership, but it's crucial to consider the long-term implications. While discounts are attractive, homeownership brings new responsibilities like maintenance costs and market risks.
I advise prospective buyers to research their local property market, assess their long-term financial stability, and consider future housing needs. Right to Buy can be an excellent opportunity, but like any major financial decision, it requires careful planning and consideration of both the benefits and responsibilities involved."
How Can I Apply to Buy my Council House?
Once you have checked that you qualify for Right to Buy, you must complete the Right To Buy Application form ( RTB1Notice) and send the form to your landlord.
Your landlord must decide whether you can buy your home (and they will sell) within four weeks (the maximum time is eight weeks if you have been their tenant for three years or less). If your landlord declines your application, they must give a reason.
- If you do not have success with your application, it is possible to submit a Right to Acquire, which means that your housing association may sell you an alternative property to the one you are currently living in, and the discount structure will be different and less than offered under Right to Buy.
- If your landlord agrees to sell, they must send you the price offer you must pay - with discounts. The time limit for this is eight weeks if it is a freehold property and 12 weeks if it is a leasehold property.
Your Landlords Offer
The next step is that you will receive an offer from your landlord in answer to your application form. This will tell you the following important information for the cash or mortgage purchase of the property:
- The price you must pay to purchase the self-contained property and how this has been calculated
- The discounts you will be given on the property price, and the calculations used to calculate the maximum discount
- A full description of the property and any land that is included in the offer price
- If it is a flat/maisonette, the cost of the service charge/service charges for the first five years
- Any known structural problems with the property
How long do I have to decide that I want to buy my council house?
Having received your social landlord's offer, you will have a maximum of 12 weeks from the date of receipt to confirm that you would still like them to sell you the property.
If you do not reply to your social landlord within the maximum 12-week period, you will be sent an official reminder. If you do not respond within a period of a further 28 days, your application will be dropped, and the landlord will no longer sell.
It is perfectly acceptable for you to notify your landlord at any time that you have decided you do not want to buy your house.
What if I disagree with the offer for my home?
It is essential to contact your landlord straight away to discuss the offer. The main point of disagreement will probably be the cash value placed on your house by the landlord. If you feel that the cash value stated is too high, you have up to 12 weeks to write to your landlord to request that an independent valuation is done on the property.
A valuer from HM Revenue and Customs (HMRC) will be appointed to visit your home and provide a valuation. After this, you have 12 weeks to accept the new valuation or to pull out of buying your council property.
Will I need a deposit to purchase my home?
If you are taking out a mortgage to purchase your home, rather than paying cash, you may well find that you do not need to pay a deposit for a Right to Buy house purchase. You will find this out sometime during the application process.
The whole Right to Buy process, including arranging a mortgage, takes, on average, one year to complete.
Can I buy my council home outright?
As a public sector tenant, you can pay for your home in cash, although most tenants cannot pay in cash and get a mortgage for the purchase.
As buying your home is probably the most significant financial outlay you will make, it is wise to have a survey done on the property to ensure there are no problems with the property's structure and other aspects like drainage. This may well be a requirement made by your mortgage provider.
What do I do if I Have Problems Buying My Home?
There can sometimes be delays when your public sector landlord does not complete your Right to Buy application form to sell in the correct time frame or your Right to Buy application is turned down.
Additional information and support can be found on the Gov.uk website.
A Final Word: Is Right to Buy for You?
The Right to Buy scheme offers an exciting opportunity to become a homeowner at a discounted price. However, consider these key points before deciding:
Key Takeaways:
- Secure a mortgage first - shop around for the best rates
- Budget for additional costs like repairs and maintenance
- Understand eligibility criteria and application timelines
- Consider long-term financial implications and responsibilities
Right to Buy can be a life-changing opportunity, but it's not for everyone. Carefully weigh the benefits against the responsibilities of homeownership. Consider your long-term plans and financial stability.
With proper planning, Right to Buy could be your pathway to a secure future in a home that's truly yours. Take your time, seek advice if needed, and make the choice that best suits your circumstances and goals.
Can I make a joint application for my council house?
The answer is yes.
You can apply with someone who shares your tenancy or make an application with up to three other family members if they have lived with you for the past 12 months.
They do not have to share your tenancy for you to make the application.
Can I purchase my mums council home?
Yes, it is possible to buy your mum's home, but there are some essential criteria you need to meet.
You or another family member can buy the house in her place if you are listed as a tenant on the agreement she has as a tenant with her public sector landlord or if you have lived with her for the last 12 months.
There is no law about where the money comes from for purchases under the Right to Buy scheme.
What if my home is an ex-council house?
Much of social housing is sold to other landlords and housing associations with their tenants still living in it.
If this has happened to you, you may still be eligible as tenants under the ‘Preserved Right to Buy’ buying scheme.
Can I buy my council home if I am on benefits?
Being on benefits will not impact your purchasing ability under the Right to Buy scheme. However, you will need to make your repayments with money other than benefits, and it is possible that becoming a homeowner will affect your benefits. For example, housing benefits.
You will still be eligible for the three years and five years discounts on the property price too.
Can I buy my council house while on Universal Credit?
Absolutely!
Tenants receiving Universal Credit have the same rights as any other tenants to purchase their home. While being on benefits might cause some mortgage lenders to hesitate, there are still lenders who will consider your application. It's highly recommended to consult with a mortgage advisor who can help you navigate your options.
Can I still buy my council house in the UK 2024?
Yes, you can still buy your council house in the UK under the Right to Buy scheme.
The scheme allows eligible council and housing association tenants to purchase their homes at a significant discount. The process involves checking eligibility, calculating potential discounts, and applying through your landlord.
Can I buy my council house with my daughter??
Yes, you can buy your council house with your daughter.
You can apply with someone who shares your tenancy or make an application with up to three family members who have lived with you for the past 12 months, even if they are not listed on the tenancy agreement.
