Right to Buy Local authority house purchase

  • Council discount can be used as deposit
  • Discount up to £75,000 or £100,000 (London)
  • Up to 5x income multiples
  • Low interest rates
  • Help with solicitor and legal process
  • Minimum tenancy of 5 years required.

Originally the discount was up to 60% for a house and 70% for a flat, however, in April 2012 the limit was raised to £75,000 and in March 2013 this was further increased to £100,000 for properties in London. The discount is based on the number of years you have been a council tenant. If the property is sold within three years a proportion of the discount needs to be returned. Need to have been a social tenant for 5 years.

If you live in a house, you can get a discount of 35 per cent after 5 years tenancy. For each extra year that you have been a tenant, you get another 1 per cent, up to a maximum of 60 per cent. If you live in a flat, you can get a discount of 50 per cent after 5 years as a tenant. For each extra year that you have been a tenant, you get another 2 per cent, up to a maximum of 70 per cent.

The Right to Buy is available to secure tenants of local authorities and non-charitable housing associations, and to assured tenants of registered providers (housing associations) who moved with their homes from a local authority to a housing association as part of a stock transfer (‘Preserved Right to Buy’)

At present many councils have transferred management and partial ownership of council properties to Housing Associations. So you may be dealing with your managing housing association rather than the local council when purchasing your council property. Technically housing associations are not-for-profit organisations and deemed to be part of the voluntary housing sector and may access government grants and loans. Their role is to potentially increase access to low cost housing to the public mainly through building managing and selling shared ownership housing. See shared ownership. Councils however, need compliance from the tenants before transferring to a housing association.

Application process

  • You may want to first establish that you can get a mortgage before applying for the right to buy.
    Call us and we can assess you free of charge the ability to obtain a mortgage. Mortgage handbook for additional infor on qualifying for a mortgage.
  • Can buy with other members of family.
  • Apply for the council/ housing association to buy the property – they will send you a form to complete and may also ask if you are able to get a mortgage and details of the solicitor that will act for you.
  • Council/housing association property assessment – once they decide that you qualify to purchase the property a valuer from council will to come assess the value of the property.
  • Council/housing association will provide formal confirmation of the purchase price and details of the property.
  • Full application for a mortgage. Lender will then do valuation for and subject to all being well, will offer to provide the loan.

Further information on Right to Buy house purchase: Local Government website

Pros

  • Ability to obtain a very valuable asset for future.
  • Low or no deposit required.
  • Unlike shared ownership ability to make changes to property without consent.
  • No maximum property value.
  • Discount treated as deposit for property.

Cons

  • Cannot sell property for a period without repaying discount.
  • Not available if bankrupt or have other bank defaults.
  • There are also restrictions on the type of property. Flats over 4 floors are not acceptable to some lenders.
  • High rise flats with certain types of concrete are also unacceptable for some lenders.