The Right to Buy Your Council House
Could you be eligible/could you afford to buy your council house?
You can visit the Government Right to Buy website for advice on if you are eligible to buy or if you can you afford to buy your council house. You will need to check with your preferred lender to see if you can get a mortgage. If you need to talk to a financial advisor then you can go to the unbiased website to find one in your area.
If you're still interested, we can give you information and go through an application with you. This is free, if you use a company to help you with your application they may charge you.
Procedure for Claiming the RTB
In summary the process is:
- You contact the Home Ownership Team for an application pack or check the Government website to see if you are eligible or to see if you can afford it
- Once you are happy that you want to go ahead, complete the right to buy application online on the Government website then download print and sign - or you could download and print a version of the right to buy form to complete by hand.
- Complete the forms and contact us to arrange submitting the completed application form and proof of ID
- We will then process your application and let you know if you have the RTB or not - within 4 weeks for a house or 8 weeks for a flat.
- If you don’t have the RTB we will tell you why, if you disagree you can contact the Department for Communities and Local Government and appeal.
- If we think you have the RTB we then send you an Offer Notice (section 125 Notice) - within 8 weeks for a house or 12 weeks for a flat.
- You have 12 weeks to contact us to tell us what you wish to do now - continue, appeal the valuation (see the next section), or withdraw.
- If you don’t tell us within 12 weeks, we will write to give you a final 28 days to tell us what you wish to do, after which your application will be closed.
- If you tell us you wish to continue to buy, you have 12 months from your Offer Notice. If you do not complete within that timescale, our legal team will send you a warning notice to complete.
- If you have not completed after that, legal will send you a second warning notice, which after the end of the period we give you to complete, we can close your application.
You may withdraw at any time in the process. You can change your mind but if your application is closed and you wish to buy again at a later date, you will need to complete a new application form and start again.
Price payable if you exercise your RTB
An independent valuer will calculate the valuation price. They will not include in the valuation price any improvements you have made which you have told us about in your application. You will not be charged for this valuation. You will be given this information in your Offer Notice. Should you disagree you may ask for the price to be re-determined by the district valuer. Whatever price they decide upon will be the purchase price if you go on to complete - whether it is higher or lower than the original valuation but you can of course withdraw at any point in the process.
The valuation price will be reduced by your discount amount. Your discount is calculated on the time you have been a tenant.
Where you have the minimum 3 years qualifying period, your discount will be:
- Houses 35%, flats 50%, plus
- for every extra year as a tenant after that, you receive 1% for houses and 2% for flats, up to a maximum of 70% discount for houses and 70% discount for flats.
Please note that it does not matter what discount percentage is calculated, we cannot currently give you more than a £80,900 discount amount, as set by the Government.
Please also note that if you have bought previously under the RTB, you may have your discount reduced. The purchase price is therefore the valuation less the discount, less any delay as described below. Please note that if we have spent more money on repairing and maintaining your home than the price of the valuation less discount price is, we can increase the purchase price to the amount which we have spent on your home. This is called the cost floor.
As there are timescales in the RTB process, if you think we are causing a delay, you can complete an initial notice of delay form. We may agree there is a delay or we may not. The delay must be described on the form and you must give us at least one month to resolve it, should we agree there is a delay.
If there is not a delay, or once we resolve your delay within the timescale, we will serve you a counter notice. If we don’t send you a counter notice in the timescale allowed, you may then serve us with an operative notice of delay. This means the rent you pay from then on will be deducted from your purchase price at completion - but you must continue to pay your rent until you complete your purchase.
You may like to send all delay notices recorded delivery. For more information you can contact the RTB agents on 0300 123 0913.
Initial costs you may have to pay
If you decide to go on to buy your home under the RTB, you may have a number of costs, which you will have to pay initially and then other costs which may be more regular. You should consider these carefully to ensure you can afford them. If you need help you may like to contact an Independent Financial Adviser.
Your initial costs may be:
- Valuation fees - your mortgage lender may charge you for arranging a valuation of your home as part of the mortgage arrangement.
- Mortgage arrangement fee - your mortgage lender may charge you for arranging the mortgage and this may be several hundred pounds.
- Survey fees - which is the cost of having a survey carried out on your home. There are different types of surveys and you may like to seek advice on which type you require as the cost and scope of these can vary greatly. The RICS (Royal Institute of Charted Surveyors) may be able to assist with more information on surveys. .
- Legal fees - you should use a solicitor or conveyancer to help you with the legal issues of buying. The fees charged may vary greatly so please ensure you ask about their costs before you agree for them to work for you. There will also be additional fees for searches and registering you as the new owner.
- Stamp Duty - if your home is worth more than (currently) £120,000, you will pay a tax on the price of your home over £120,000. Some houses are within areas classified as disadvantaged areas and the stamp duty thresholds are slightly higher. The amounts payable are - Disadvantaged Area - £0 - £150,000 nothing to pay. Over £150,000 - £250,000 1%. Non Disadvantaged Area - £0 - £120,000 nothing to pay. Over £120,000 - £250,000 1%. The stamp duty is payable on the price which is paid (the discounted price).
Regular costs you may have to pay
If you buy your home there may well be regular costs you have to pay. These may include costs for the following:
- Your mortgage payments and any mortgage payment protection costs you have agreed.
- Any life insurance or life assurance costs you have agreed.
- Building insurance and any contents insurance.
- Council tax.
- Water and sewerage charges.
- Utility services such as gas and electricity and any others.
- All the costs of maintaining the interior of your home.
- The costs of management and maintenance described in more detail below.
Please note that these costs may be in addition to any other living costs you may have. You may like to contact an Independent Financial Advisor about what you can afford.
If you buy the freehold (a house) you will have to manage and maintain all of your property and you will have to pay the costs of any repairs and maintenance.
If you buy a lease (a flat or maisonette), we generally maintain the structure and exterior of the building and the parts shared with other tenants. We may also provide the service such as electricity, cleaning and care-taking. We will certainly insure the building. You may also have to pay a ground rent.
All of these costs will be charged through a service charge which you will have agreed to pay as part of the lease you bought under the RTB. We will also charge a management fee to manage your building. We will have given you an estimate within your Offer Notice of the estimated cost we will charge you for managing and maintaining your building/estate. Please note that these may go up.
If you buy a lease, we will also have given you an estimate of the larger costs (major works, improvements and repairs), which we think will take place in the next 5 years and the amounts you may have to pay for those items. We cannot charge you more than the figures we estimated for those works (plus inflation) for the 5 years from completion, but after 5 years we may charge you your share of the cost of any works we undertake.
The risk of repossession
If you do not keep up regular mortgage payments your home may be at risk of being repossessed. If at any time you have any problems with mortgage repayments we strongly suggest that you contact your mortgage lender as soon as possible to discuss the matter.
Your mortgage lender should be able to provide you with details of what may happen and any assistance they may be able to give, when you are considering taking out a mortgage. Please take the time to consider your options before you agree a mortgage, as different lenders may offer different assistance packages and some none at all.
If you do not pay your service charges and/or major works then we may look at taking legal action if you don't work with us to come to a mutually acceptable agreement to clear them over an acceptable period.
Selling your Home
If you sell within the first 10 years after completion, you must also offer the property back to us under the Right of First Refusal. Your solicitor will have to send a letter with the details of the property to our legal team. We will either say that we want to purchase the property back or not. If not you are then free to put it on the open market with an estate agent of your choice.
You may sell your home whenever you like. However, if you buy under the RTB, you may have to pay back some or all of the RTB discount.
The discount you may need to pay back depends on when your application to buy was made and when you are selling your home.
Discount will be repayable for a 5 full years from the date of completion.
The discount repayable is calculated on a percentage of the resale value of your home, not just the discount that was received under the original RTB, disregarding any improvements and the period the resale takes place in.
- Within the 1st year of completion - the whole discount is repayable.
- Within the 2nd year of completion - four-fifths of the discount is repayable.
- Within the 3rd year of completion - three-fifths of the discount is repayable.
- Within the 4th year of completion - two-fifths of the discount is repayable.
- Within the 5th year of completion - one-fifth of the discount is repayable
- After 5 complete years no discount is repayable.
Property X was valued at £100,000 at the time you bought it from the landlord, and you received a discount of £38,000. The discount that was given at the time was therefore 38% property X is now to be sold and is now valued at £130,000 - no home improvements have to be taken into account. The sale is taking place within the 3rd year following the original Right to Buy completion. The discount repayment calculation is as follows:-
£130,000 (Market Value) x 38% (discount) = £49,400 - HOWEVER as the sale is taking place in the 3rd year following completion, we reduce this by 3/5ths therefore:-
£49,400 x 3/5th = £29,640 total amount of discount to be repaid.
Last Updated: 24 August 2021