What is Right to Buy and am I eligible?
Council tenants in England may be eligible to buy their home at a discounted price. But is it still a good idea to buy a council home?
What is Right to Buy?
Right to Buy is a scheme that allows tenants to purchase their council-owned properties at a discounted rate.
The history of Right to Buy
Right to Buy was introduced 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.
The scheme was conceived to enable council tenants to get a foot on the housing ladder. For the government, Right to Buy generated revenue and reduced their responsibility for maintaining council properties.
Do I qualify for Right to Buy?
You could be eligible to buy your council home under the Right to Buy scheme if:
- The property is your only or main home.
- Your landlord is a public sector body, such as a council, housing association or government department.
- You have had a public sector landlord for a minimum of 3 years (although this period does not have to be continuous).
- You are a 'secure tenant' - i.e. you have the right to live at the property for the rest of your life.
Can I make a joint application with another person?
Yes. You can make a joint application under the Right to Buy scheme with the following parties:
- Anyone who shares the tenancy with you - they do not have to be your spouse or civil partner
- Up to 3 family members who have lived in your home for the 12 months leading up to the date you make the Right to Buy application. The family members do not need 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.
Will I be eligible if my home is an ex-council home?
Maybe. If the council sold your home to another landlord then there may be a 'Preserved Right to Buy'. Under this legal right, if a property was transferred from a landlord whose tenants had the right to buy, the tenant will retain the right even if the new landlord's other tenants do not have this right.
What if I have lived in armed forces accommodation?
Any time spent living in armed forces accommodation will count towards the qualification period and the discount calculation.
I am a housing association tenant - can I use Right to Buy?
Not currently. However, a Voluntary Right to Buy pilot is currently running in the MIdalnds so this situation may change in due course.
What if I am on benefits?
If you claim state benefits it does not affect your eligibility for Right to Buy. However, you will need to make sure you can afford any repayments on the property.
How much discount can I get?
As of 6 April 2020, you could get a maximum discount of 70% or £84,200, whichever is lower.
If the property is in a London borough, the maximum discount is £112,300.
This maximum discount is increased every year on 6 April, in line with the Consumer Prices Index (CPI).
The discount is calculated based on:
- The value of your property.
- The length of time you have been a tenant with a public sector landlord. If you are making a joint application, the discount will be calculated based on the person the longest-serving tenant.
- Whether you are buying a flat or a house
The following table illustrates how the maximum discount you could receive:
|Years you have been a public sector tenant||Houses||Flats|
|3 to 5 years||35%||50%|
|5 + years||35% plus 1% for every additional year you have been a tenant||70% plus 1% for every additional year you have been a tenant|
How will the property be valued?
The value of the property will be calculated based on its open market value at the time of purchase. The landlord will usually arrange for a valuer to visit your home and work out a valuation.
If you disagree with the landlord's valuation, you have the right to appoint an independent valuer and the landlord will have to pay for this.
What if I subsequently sell my home?
You are perfectly entitled to sell your home whenever you want.
However, if you sell your home within five years of having purchased it through the Right to Buy scheme, you may have to have to pay back some or all of the discount, as follows:
|The number of years the property is sold within:||% of discount you will need to repay|
Should I buy through the Right to Buy scheme?
For many council tenants, Right to Buy offers a great opportunity to buy their home.
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.
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.
Will I be able to get a mortgage?
Mortgages are readily available for properties bought through the Right to Buy Scheme. Most mortgage lenders will accept the discount as the mortgage deposit.
There may also be other financing options available to you, such as Shared Ownership or Help to Buy.
Why is Right to Buy controversial?
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 being sold on to private landlords, to be rented out at premium rates.
As such, Right to Buy is considered by some to be less successful than hoped at generating income for local authorities and providing long term affordable housing.
Right to Buy was been suspended in Scotland and Wales due to concerns over the availability of social housing. If you’re a council tenant in England, Right to Buy is still an option.
As a council tenant, however, Right to Buy controversies need not affect your decision to buy.
How can Quittance help?
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