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What makes a good candidate for the Right to Buy scheme?

What makes a good candidate for the Right to Buy scheme?
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Are you a council tenant living in England? If so, there’s a chance you can buy your council home through the UK government’s Right to Buy scheme. Here’s what you need to know about the scheme, including who can apply and what to expect. 

What is the Right to Buy scheme?

Introduced in 1980, the Right to Buy scheme gives council tenants the chance to join the property ladder by purchasing their council house. Here’s how it works.

  • If you qualify for the scheme, you get a discount on the property price.
  • Council house tenants get a 35% discount if they’ve been living in the house for between three and five years. If you’re a flat tenant, it’s a 50% discount. 
  • The discount goes up for each additional year you live in the property, going up to a maximum of £84,200, unless you’re in London where it’s £112,300. 

Who is eligible under the scheme?

You can apply to use the Right to Buy scheme if:

  • It’s your main place of residence.
  • You don’t share any rooms with people outside your household (i.e. it’s a self-contained unit).
  • You’re a secure tenant, meaning you’ve been there over 12 months and the landlord hasn’t told you there’s a problem with your tenancy.
  • You’ve had a public sector landlord, such as the council, for three years in total. If you’re unsure whether this applies to you, ask your landlord for help. 

You’re not eligible if any of the following apply:

  • You’re an introductory tenant. 
  • It’s a home reserved for the elderly or disabled.
  • You’ve been made bankrupt or you have county court judgments (CCJs) against you for debt
  • The landlord is trying to evict you.

There’s a similar scheme in Northern Ireland, but Right to Buy schemes have ended in Wales and Scotland. 

Is the Right to Buy scheme right for me?

Okay, so that’s how the scheme works and who can apply. But is it the right option for you? To help you decide, let’s check out what Right to Buy means for your money. 

  • Most people need a mortgage to buy their council property. This is a big financial undertaking, and you need to ensure you can afford the monthly repayments and lending fees before you commit.
  • You’ll need to pay one-off fees like stamp duty and legal costs.
  • If you can’t keep up your mortgage payments, it’ll affect your credit score
  • You’re responsible for repairs and maintenance, which can lead to some unexpected costs.
  • Are you buying a flat? You’ll probably need to pay service charges for communal maintenance and upkeep. Factor this into your personal budget.
  • Once you start paying a mortgage, you can’t get Housing Benefit. 

Where can I apply?

Ready to start the process? You can apply alone or with someone else who shares the tenancy. Here’s how you apply for the Right to Buy scheme.

  • Fill out an RTB1 form and send it to your landlord. 
  • Give your landlord four weeks to reply. It might take eight weeks in some circumstances. 
  • If they intend to sell you the property, your landlord should make you an offer.
    • Applying for a freehold? They must make an offer within eight weeks of accepting your application.
    • Applying for a leasehold? They’ve got up to 12 weeks. 
  • If your landlord rejects your application, they must tell you why. You’re also entitled to appeal the decision
  • If your landlord doesn’t stick to these timeframes, you can apply for a price reduction by completing an RTB6 form.

You can contact Citizens Advice if you’re unhappy with how your landlord handles your application or if they ignore your correspondence.

  • If you’re happy with the offer, accept it within 12 weeks or you might lose the sale. 
  • Unhappy with the valuation? Tell the landlord, and they’ll ask someone from HMRC to come along and value your home.  

Can I sell my home once I buy it?

Yes, but there are some important caveats. If you sell within:

  • One year of buying the property: you’ll need to repay the whole purchase discount.
  • Five years: you’ll pay back a portion of the discount, which decreases by 20% each year. 
  • 10 years: you’ll have to offer it first to your old landlord, or another landlord in the area.

If the landlord doesn’t buy it within eight weeks, or you’re selling after 10 years, you’re free to sell on the open market. 

Takeaway

There’s no such thing as an ‘ideal’ candidate for the Right to Buy scheme. But you might be a good candidate if you’ve lived in the property for more than three years, you’ve got a decent credit score, and you can afford the monthly mortgage payments. 

Not sure if Right to Buy is for you? Speak to a Right to Buy advisor

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