What is Right to Buy?
The Right to Buy scheme
What is Right to Buy? The Right to Buy is simply that you have the ability to purchase your home from the Local Authority as long as you meet certain criteria. You will also receive a discount on the property from the council as long as you agree to keep the property for 5 years, this is called a pre-emption period (more details on discounts below). You can apply to purchase your home under the Right to Buy scheme if the following criteria is met:
It’s your only home.
You’re a council tenant, also known as a secure tenant.
You’ve had a public sector tenancy for at least 3 years – It does not have to be 3 years in a row!
If you are a housing association tenant you aren’t currently eligible for the Right to Buy scheme (at the time of writing) but there may be plans to further expand this in the future.
If you’re eligible then you can also purchase the property with others from the following list, it does not have to be on your own:
Someone who shares the tenancy agreement – Is named
Your spouse or civil partner
Up to 3 family members who’ve lived with you for the past 12 months – They do not have to be on the tenancy agreement but it must be their main home
The above is a summary of eligibility, if you need more information you can find it on the Government Right to Buy website here.
Once you have checked you are eligible you will need to formally apply to the Local Authority, you will need to:
1. Complete the RTB1 form – Copy can be found here
2. Complete the Right to Buy additional information form – Copy can be found here
3. Once the forms are completed you need to send these to the Home Ownership Team at your local council.
You can get up to 35% discount if you’ve been a council tenant for between 3 and 5 years. After 5 years the discount goes up by 1% for every extra year you’ve been a tenant, up to a maximum of 70% or £84,200 in England (£112,300 in London Boroughs), whichever is the lower.
You can get a 50% discount if you’ve been a public sector tenant for at least three years. The discount remains at 50% until you have five years tenancy. After 5 years, the discount goes up by 2% for every extra year you’ve been a public sector tenant, up to a maximum of 70% – or £84,200 across England (£112,300 in London boroughs), whichever is lower.
Selling your property?
You are able to sell your home after purchasing it using the Right to Buy scheme. If you sell within 5 years of purchase you’ll have to pay back some or all of the discount provided to you. The amount you need to pay back is on a tapered scale and after 5 years will be zero, please make note of the paragraph below in bold:
100% of the discount in year one
80% of the discount if property sold in the second year
60% of the discount if property sold in the third year
40% of the discount if property sold in the fourth year
20% of the discount if property sold in the fifth year
In addition to the above, if you sell the property within 10 years you have to first offer it either to:
Your old landlord (Local Authority)
Another social landlord in your area
Be aware that the Local Authority or new social landlord will need to agree the market value of your home, if this cannot be agreed between you then it will be referred to a district valuer who will make an independent valuation of the house. If the offer has not been accepted within 8 weeks you will be free to sell the property on the open market.
There are lots of places you can find out more information, your local authority website will the first place to look and also the Government Right to Buy website. In addition, there are other places for independent advice like Citizens Advice or the Money Advice Service.
Feel free to contact us for more information or advice on how best to look at your next steps.
Please remember, your home may be repossessed if you do not keep up repayments on your mortgage or any loan secured against it.