What is Right to Buy and am I eligible?
In England and Northern Ireland, council tenants may be eligible to buy their home at a discounted price. But is it a good idea to do so?
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What is Right to Buy?
Right to Buy is a scheme that was brought in by the Conservative government in 1980, and was promoted as a way to increase social mobility by allowing council housing tenants to buy their properties at below the market value.
It enabled people who may not otherwise have been able to afford to buy a house to take the first step on the property ladder. For the government, it generated revenue and reduced the responsibility for maintaining council properties.
What are the controversies?
As a council tenant, Right to Buy controversies need not affect your decision to buy.
As far as the success of the scheme is concerned, there have been reservations over:
- Council housing being sold off but not replaced, despite housing shortages
- Many properties under Right to Buy ending up sold on to private landlords, to be rented out at premium rates.
This has meant that Right to Buy is considered by some to be less successful than hoped at both generating income for local authorities, and providing long term affordable housing.
It is partially owing to concerns over the availability of housing that Right to Buy has been suspended in Scotland and Wales. If you’re a council tenant in England however, the option could still be available to you.
Am I eligible?
You could be eligible to buy your property under Right to Buy if:
- Your landlord is a public body such as a council, housing association or government department
- You have lived at the property for a minimum of three years (this does not have to be continuous)
- You have no legal issues with debt or any outstanding possession orders.
- You do not already part own your property with the council
How much are properties discounted by?
As of April 2018, council tenants could get a maximum discount of up to £80,900, or £108,000 if they’re based in London. This amount increases every April, in line with inflation.
The discount is calculated based on:
- The length of time you have been a tenant with a public sector landlord
- Whether you are buying a flat or a house
- The value of your property.
If you sell your home within five years, you can expect to have to pay back some or all of your discount.
Could I make a joint application?
According to the Gov.uk website, you can make a joint application under the Right to Buy scheme with the following parties:
- Someone who is on the tenancy agreement with you
- Your spouse or civil partner
- Up to three family members who have been living in your home for the 12 months immediately before you make the application. They don’t have to be on the tenancy agreement but it must be their main home.
Legally, a Right to Buy purchase can be financed by anyone (for example a family member could help you out), however legal ownership will only ever be in the names of eligible tenants and applicants.
I am eligible: should I use Right to Buy?
For many council tenants, Right to Buy offers a great opportunity to get a foot on the property ladder.
If you fit the criteria, investigate the financial options available to you and seriously consider putting in an application to buy your home - the scheme may ultimately be scrapped or suspended in England too.
If you are unclear on any of the details of Right to Buy or are considering a joint application, it is advisable to get financial and legal advice on the process.