Can I Buy my Council House? Right to Buy Explained
Using the Right to Buy initiative can be the perfect solution if you have always dreamed of being a homeowner but are struggling to accrue enough funds to buy your council home.
The most significant advantage is that your council house or flat will be much cheaper to afford than similar properties on the open market. As a result, you can secure a mortgage and may not have to pay a deposit.
If you are a public sector tenant, buying your home through the scheme is straightforward and much more affordable, so it is the ideal way to get on the first rung of the property ladder.
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.
- 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.
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. On the other hand, if your home is a flat, you could be eligible for a 50% discount.
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 £87,200 discount in all parts of England and £116,200 discount 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 cap or maximum of 70 (%) the 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 5 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 – or if your landlord has spent more money than the property is now worth
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
To purchase your home with the Right to Buy initiative is exciting and a great way to get a home at a discount. However, it is essential to remember that you will need to secure a mortgage – which can take time.
Be sure to shop around for the best-priced mortgage - Seeking professional advice can be helpful here.
Often if you are purchasing your home with this scheme, you are not required to pay a deposit. Being a Right to Buy homeowner brings many bonuses, but buying your council property or being housing association tenants, makes it prudent to remember that having your own home also brings added expenses for repairs and maintenance.
Right to Buy is an excellent investment for your future if you can use it.
Frequently Asked Questions about Buying your Council House
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.
