Tag: freehold property
With effect from 2 April 2012 the maximum right to buy discount for council tenants has been increased to £75,000.
This constitutes a considerable change in policy by the present government. Previously, right to buy had become unattractive , by capping the amount of discounts according to location. In most of greater London for example the maximum discount was only £16,000.
The right to buy discount available depends on the amount of time the tenant has occupied the property. For freehold houses, the discount starts at 35% and increases at 1% per year to 60%. For leasehold flats the starting figure is 50%, rising to 70% at 2% per annum. For example, if you wanted to buy a flat worth £200,000 and had been a public sector tenant for ten years, you would qualify for a 60 per cent discount (£120,000). However, the maximum discount is £75,000. This means that if the flat was worth £200,000, you could buy it for £125,000. It is also important to realise that if the property is sold within 5 years of the right to buy then some of the discount will have to be repaid. More information on eligibility and discounts can be found on the Direct Gov website.