The Basics:

  • Right to Buy allows most tenants in council housing to buy their home at a discount
  • You can benefit from a discount of up to £77,900 (or £103,900 in London areas) on the market value of the property
  • This size of discount depends on;
    • how long you have been a tenant with a public sector landlord
    • Type of property (flat or house)
    • The value of your property
  • The right-to-buy can be made in a joint application with someone who shares your tenancy and/or with up to three family who have lived with you for the past twelve months (even if they do not share tenancy)

Eligibility:

  • Buyer must have lived in the property for at least three years as a public sector tenant
  • The house or flat you wish to buy must be self-contained and your only principal home
  • If you were previously a tenant of a local authority which have now transferred ownership the property to another authority you may have a preserved right to buy, but you must have been living in the property when it was transferred

Pros

  • Gives the opportunity for long term council house tenants to buy their home with significant discounts on the purchase price
  • An excellent opportunity to move out of rent onto the property ladder where owners can benefit from rising house prices
  • Even if you have previously lived in and moved back into a public sector tenancy you can benefit from right to buy
  • Right-to-Buy discounts can be used more than once by one buyer on different properties

Cons

  • If you sell the property within five years you must pay back an amount of the given discount back (after five years, no repayment is required)
  • When selling, the previous landlord gets first refusal to purchase the property if you decide to sell in the first ten years
  • If the landlord has spent money on improving or maintaining the property in anyway the discount will be reduced
  • Purchasers will have to pay service charges in some properties which are put toward maintenance of communal areas etc
  • Buyers (unless cash buyers) will still need a mortgage which come with all the normal costs and may not be able to obtain a loan for the full amount you require
  • Buyers will also be liable for additional costs of owning a home such as; water and electricity bills which may or may not have already been a part of the tenancy agreement

Conclusion: This scheme is a fantastic opportunity for public sector tenants to get onto the property ladder and potentially reduce the long term costs of housing as well as purchasing a potentially appreciating asset. If you do not plan to live in the property in the short term (less than five years) it may not be worth your while with having to pay back the discount as well as having to pay the costs relating to the purchase of the property. Purchasers must also be aware of their own personal financial situation and whether they can afford the costs that come with home ownership, such as; mortgages and utility bills. As a final remark this is a very general overview of the Right-to-Buy scheme meant to give anyone interested the key facts, the government has an extensive document relating to all the aspects of this scheme in detail and can be found at: https://righttobuy.gov.uk

Angie Newnham
Article by Angie Newnham
Having worked for various law firms in the Bournemouth and Poole area Angie Newnham decided to set up her own business in 2010. Angie’s experience covers a range of legal disciplines including Property Law and Conveyancing, which includes both residential, commercial and agricultural work, Social Housing, Landlord & Tenant issues, Wills, Lasting Power of Attorney and a niche interest in equine law and equestrian agreements.

Leave a comment