The Right to Buy scheme helps people who are living in council houses to buy their home at a discounted price.
The scheme was first introduced in the 1980s as a way to help more people get on the housing ladder. With the price of home ownership still increasing, the scheme still plays an important role in giving people financial assistance to buy a home.
Who is eligible for the Right to Buy scheme?
The Right to Buy scheme is only widely available to people living in England, and to some people in Northern Ireland and Wales. But it’s no longer in place in Scotland. In the main, it’s a scheme for council tenants in England.
You can apply to buy your council home if:
- It’s your only home, or your main home.
- The home is self-contained. In other words, you don’t share a bathroom, kitchen, or communal area with another residence.
- You’re a secure tenant. That means that you have a contract for tenancy with a public sector landlord.
- You’ve had a public sector landlord for 3 years. Examples of public sector landlords include: a council, a housing association, an NHS Trust, or the Army. It doesn’t have to be 3 consecutive years.
- You don’t have any legal issues with debt, such as an outstanding possession order, a bankruptcy order, or any history of tenancy fraud.
How does it work in Bristol and the South West?
The Right to Buy scheme gives you a discount on the market value of your home. The discounts depend on the type of property that you’re buying, and the location of your property, and it varies between different regions in the UK.
In Bristol and the South West the maximum discount that you can get on your home is £30,000.
That’s a significant discount, and it may mean that you don’t require a deposit for the home, as the discount could act as your deposit.
It’s likely that you’ll still need a mortgage though (most people do). We can recommend some mortgage brokers to you if you’d like some help with working out how much you can borrow, and what the monthly repayments will be.
What’s the process for applying?
The first step is to complete a RTB1 form.
https://www.gov.uk/government/publications/notice-claiming-the-right-to-buy–2
The quickest and simplest way is to do this online, and then you send it to your landlord. In Bristol, you can find details of how to do this on the council’s website.
Then your application is assessed, and the council will confirm if you are eligible for the scheme. Your landlord should respond within four weeks. They don’t have to sell the home to you, but if they’re saying ‘no’ then they have to give their reasons.
Next a surveyor or valuer comes round to assess the market value of your property. They will also work out the discount for you, depending on how long you’ve had your tenancy.
You’ll then get an offer notice, which sets out the price and the discount. You have a bit of time to think about it and you have 12 weeks to accept or decline the offer.
If you accept, then you begin the usual process of buying a home. You’ll arrange a mortgage, arrange a survey, and instruct a solicitor to carry out the conveyancing.
Once you’ve bought the home, remember that you’ll be responsible for maintaining and repairing the property. But you’ll also have an asset for the future.
Be aware of the selling restrictions
Once the home is legally yours, you can do what you like to it in terms of redecorating and changing things. But you need to be aware of restrictions when it comes to selling a home that you bought with the Right to Buy scheme.
If you sell your home within 5 years, you’ll probably have to repay some or all of the discount you received. That means you could be repaying as much as £30,000.
But the figure that you repay decreases as you stay in the property over time. So, if you sell your home in the first year, you’ll have to pay back the entire discount. But after that, the amount you repay reduces every year:
- In year 2 it’s 80% of the value of your home when you come to sell it
- In year 3 it’s 60%
- In year 4 it’s 40%
- In year 5 it’s 20%
With that in mind, it’s wise to view it as a long-term investment. After 5 years of owning the house, you can sell it without any restrictions.
If you’d like any advice with the Right to Buy scheme, or help with your conveyancing, please get in touch with us. We’re happy to help!