Right to Buy Scheme
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Right to Buy Scheme
Charlie Connolly talks us through the Right to Buy scheme.
Is the Right to Buy scheme still available at the time of recording this episode?
Yes, as of today in November 2024, the Right to Buy scheme is still available in England only. It has been abolished in Wales and Scotland.
What does Right to Buy mean and how does it work?
The Right to Buy scheme is basically where people who rent their council home are eligible to purchase them. It comes with the inclusion of a generous discount, based on how long they have lived in the property. Basically, you’re purchasing the property directly from the council.
Who is eligible for Right to Buy?
So in order to be eligible for a Right to Buy mortgage, you must have been a public sector tenant for at least three years. It won’t apply if you live in sheltered housing or other housing that is particularly suitable for elderly or disabled people.
You must not have any legal problems with debt or outstanding possession orders, or any antisocial behaviour issues.
Can you get Right to Buy as a joint application?
Yes, of course. You may be able to apply for a joint application for a Right to Buy mortgage. You can do this with your spouse or civil partner – and in fact with up to three family members, as long as they have lived with you for the past 12 months and are over 18.
To be included in a Right to Buy mortgage, applicants often need to be named on the property tenancy agreement.
What is the process if I do qualify for Right to Buy?
Okay, so firstly you would need to complete a RTB1 notice, which is the Right to Buy application. You can find this form on the government website. Once you’ve completed this, you need to send it to the landlord, which may be the council.
Your landlord then has four weeks from receiving your application to make a decision, or eight weeks if they’ve been your landlord for less than three years. If they agree to sell, they’ll send you the offer.
They must do this eight weeks of saying yes if you’re buying a freehold property. It’s 12 weeks if you’re buying a leasehold property. You then have 12 weeks to complete the purchase.
Do I need a deposit for Right to Buy?
No, not necessarily, because the discounted value can be used as the deposit. For example, if the full market value was £160,000 and the council or the landlord agreed to sell it to you for £110,000, that £50,000 difference is effectively the deposit you’re putting down towards the property.
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What is the discount if you live in a house or a flat?
The discount is based on a few things. First is the type of property you’re buying and whether it’s a flat or a house. The value of your home and where you reside is also a factor. For example, living in the West Midlands or London can affect the discount you receive.
The length of time you have been a tenant with the public sector landlord is also a factor. It’s worth noting you would have to repay some or all of the discount you receive if you sell your home within the five years of purchasing that property.
The maximum discount you can get is 70% of the value of the property, up to £136,000 if your home is in a London borough, or £102,400 if your home is outside London. If you live in a house you can get a 35% discount once you have lived in the property for three to five years. After the first five years, the discount goes up 1% for every extra year you’re on the public sector tenancy agreement.
If you live in a flat, you get 50% once you’ve lived in the property for three to five years. After the five years, the discount goes up 2% for every extra year you’ve been a public sector tenant, up to the maximum discount of 70% [information is correct at the time of recording in November 2024].
Can I let my Right to Buy property?
This is ultimately going to be down to the landlord, the council and the mortgage lender. You’d have to approach those and to ask the question. There are a lot of councils and landlords and mortgage lenders. Ultimately, whether you can let is down to them.
Are there options if I’m refused by the council?
If you’re refused by the council, you can potentially go to a tribunal within 56 days of the council turning down your application.
What does preserved Right to Buy mean?
This is when your house used to be owned by the council, and they have sold it to another landlord, such as a housing association. If this is the case, you still may be able to use Right to Buy.
What does Right to Acquire mean?
Right to Acquire is similar to Right to Buy, but it’s intended purely for Housing Association tenants. With Right to Acquire, you won’t get the same levels of discount, but it would be in the region of £9,000 to £16,000.
How do I apply for Right to Buy? What’s the process?
Firstly, you would complete the Right to Buy application, which is called the RTB1 notice – you can find this on the government website.
Can the council refuse my Right to Buy application?
The council can refuse your application. If the landlord says no, they must say why. If they refuse your purchase because they believe the property is suitable for housing elderly people, you are able to appeal. You can take it to a tribunal within 56 days of the council turning down the application.
What happens if there are delays in the process?
If your landlord can’t complete the Right to Buy application within the 12 weeks, you could get a reduction in the sale price. You would have to complete a form and send it to the landlord and it goes from there.
How can a mortgage broker help with Right to Buy?
We have vast experience in Right to Buy mortgages, so we’ll be able to guide you along the way, and help you with all the questions above and more.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.