Can I Buy My Council House?

The Right to Buy scheme allows tenants to purchase the homes they live in from their local council at a discount.

Using it, around 3.9 million people with council tenancies in the UK could buy their properties at a considerably lower price than they'd have to pay on the open market.

You may not be able to buy your council property now but it's still worth planning how long it might take to build up funds. A further incentive is that for every year you live in your home, the discount becomes greater and you will have more time to save.

Right to Buy eligibility for council tenants

You are eligible to apply to the right-to-buy scheme to purchase your council home if:

• It’s your only or main home.
• It’s self-contained.
• You’re a secure tenant.
• You’ve had a public sector landlord (e.g. a council, housing association property company or NHS trust) for 3 years (not necessarily 3 years in a row).

• Someone who shares your tenancy.
• Up to 3 family members who’ve lived with you for the past 12 months (even if they don’t share your tenancy).

Right to Buy conveyancing process

The Right to Buy conveyancing process differs slightly from the standard conveyancing process.

• Apply to the council - fill in the Right to Buy application form (RTB1 notice) and send to your landlord who will reply within four weeks with an offer.
• Valuation - you'll need to obtain a RICS valuation of the property to confirm the open market value (what the property is worth before the discount).
• Right to Buy solicitors - you will need solicitors to handle the transfer of the property from the council to you. They review all legal documents and act on behalf of your lender (if applicable).
• (if applicable) Get a mortgage - when getting a Right to Buy mortgage, the discount is often used as your deposit so the mortgage could make up the total you are paying toward the mortgage. You can however purchase the property without a mortgage using savings, gift or a loan.
• Order property searches - these include the local authority search, drainage and environmental.
• (if applicable) Building Survey - you can use a Building Survey to highlight defects or improvements within the property that change the property value.
• Completion - there is no exchange of contracts under the Right to Buy conveyancing process so as soon as the solicitor is happy from a legal standpoint and you have your mortgage offer (if applicable) a completion date can be set for a Monday.

Are Right to Buy solicitors fees more expensive?

The solicitors fees are generally more expensive than a normal property because:

• Land Registry - A first registration of the property costs double as the solicitor is required to send a postal submission to transfer the property from the council to you.
Council houses built before 1995 typically need to be registered, if the property was built post-1995, it should be registered already.

• Other fees - Solicitors charge a supplemental fee for handling the conveyancing. The charge ranges from £100 to £300 EXC VAT. We include this fee within our Fixed Fee when we know the property is being purchased as a right to buy.

Right to Buy discount price

This will vary from 35%-70%, depending on how many years you've lived at the council property and your eligibility. The discount gets applied to the current market value of your property and you'll have to find the funds to buy cover the discounted price, by:

• Paying for the amount in full from your savings;
• Sharing the purchase with other eligible parties to combine your savings; and/or, most commonly,
• Paying a deposit and getting a Right to Buy mortgage to finance the rest.

A Right to Buy mortgage is different compared to standard mortgages and you’ll need to get a bespoke mortgage product from your mortgage lender.

What discount can you get on a council property?

You can get a discount on the market value of your home when you buy it if you qualify for the Right to Buy scheme.

The maximum discount is £102,400 across England, except in London where it's £136,400. It will increase each year in April in line with the consumer price index (CPI).

The discount is based on:

• How long you've been a tenant with a public sector landlord.
• The type of property you’re buying - a flat or house.
• The value of your home

If you’re buying with someone else, you count the years of whoever’s been a public sector tenant the longest.

You’ll usually have to repay some or all your discount if you sell your home within 5 years.

You might get a smaller discount if you’ve used Right to Buy in the past.

Right to Buy houses

You get a 35% discount if you've been a council tenant for 3 to 5 years. The discount goes up by 1% for every extra year you've been a public sector tenant, up to a maximum of 70% – or £102,400 across England and £136,400 in London boroughs (whichever is lower).

Council fats

You get a 50% discount if you've been a council tenant for 5 years. The discount goes up by 1% for every extra year you've been a public sector tenant, up to a maximum of 70% – or £102,400 across England and £136,400 in London boroughs (whichever is lower).

If your landlord has spent money on your home:

Your discount will be less if your landlord has spent money building or maintaining your home:

• In the last 10 years - if your landlord built or acquired your home before 2 April 2012.
• In the last 15 years - if you’re buying your home through Preserved Right to Buy, or if your landlord acquired your home after 2 April 2012.

You won’t get any discount if your landlord has spent more money than your home is now worth.

How to apply

You must do the following:

• Complete the Right to Buy application form (RTB1 notice).
• Send it to your landlord.
• Your landlord must reply with a yes or no within four weeks of getting your application (eight weeks if they've been your landlord for less than 5 years). If your landlord says no, they must say why.
• If your landlord agrees to sell, they'll send you an offer. They must do this within eight weeks of saying yes if you're buying a freehold property, or 12 weeks if you're buying a leasehold property.
• Instruct a RICS surveyor to value your home to ensure the price you are paying is correct.
• Instruct a conveyancing solicitor to handle the legal work with the council.

Two things to be aware of in the conveyancing process:

• There is no exchange of contracts - you go straight to completion.
• Invariably you complete on a Monday. If you don't manage to complete it on the Monday planned, you normally have to wait until the next available Monday to finish the process.

Selling your Right to Buy home

Selling your Right to Buy home is an option many ex-council tenants might be faced with, either needing to upsize or due to a change in financial circumstances, even potentially due to the death of the owner.

If you sell your home within 10 years of purchasing it through the Right to Buy scheme, you must first offer it to either:

• Your old landlord.
• Another social landlord in the area.

The property should be sold at the full market price agreed between you and the landlord.

If you can't agree, a district valuer will say how much your home is worth and set the price. You won't have to pay for their independent valuation.

You can sell your home to anyone if the landlord doesn’t agree to buy it within 8 weeks.

Paying back your Right to Buy discount

You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

• 80% of the discount in the second year
• 60% of the discount in the third year
• 40% of the discount in the fourth year
• 20% of the discount in the fifth year

The amount you pay back depends on the value of your home when you sell it.

Example for repaying your discount

You bought your home worth £100,000 and got a 40% discount (£40,000). You then sold your home after 18 months for £120,000.

40% of £120,000 is £48,000. As you’re in the second year, you would repay 80% of £48,000 (£38,400).

You may not have to pay back the discount if you transfer ownership of your home to a member of your family. You’ll need to agree this first with your landlord and then get a solicitor to do this for you.

Limiting who you can sell to

Your former landlord may limit who you can sell your home to if your home is in:

• A national park.
• An area of outstanding natural beauty.
• An area the government says is rural for Right to Buy.

For example, you may have to sell your home to someone who’s lived or worked in the area for more than 3 years. This may mean you'll have difficulty getting a mortgage to buy your home in the first place.

Your landlord will tell you if this could apply to your home when you apply for Right to Buy.

Selling your Right to Buy

If you are looking to sell your council house under the Right to Buy scheme then you need to:

• Contact your landlord and confirm your intentions to sell.
• Agree any discount and who you can sell the property to.
• Instruct a RICS surveyor to value your home to ensure the price you are paying is correct.
• Instruct Right to Buy Solicitors to handle the legal work with the council.