WITH a cost of living crisis in full swing, getting on the property ladder may appear harder than ever.
But there are schemes like Right to Buy that could help make buying your own home a reality.
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What is the Right to Buy scheme?
Right to Buy is a government scheme that allows council – and some housing association – tenants in England to buy their property at a discounted rate.
It’s now been abolished in Scotland and Wales but is still currently running in Northern Ireland.
Across England, the maximum discount you can receive if you qualify is £87,200.
This excludes London boroughs where it is £116,200.
Tenants must have lived in their home for between three and five years to be eligible for the 35% discount.
An additional 1% can be claimed for every year after that up to 70 per cent.
It was brought into effect 40 years ago by then Prime Minister Margaret Thatcher, through the Housing Act 1980.
Is Right to Buy a good idea?
Whether or not you choose to take up Right to Buy depends on your personal circumstances.
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There are a number of things to consider when applying.
Should you choose to buy, you’ll then be ultimately responsible for financing the property, which means you’ll need to apply for a mortgage and make payments on it.
You will also face responsibilities and financial outlay you wouldn’t have had while renting, like maintenance and repairs.
If you’re a leaseholder, you may well have to pay a service charge too to the council or housing association.
There are also some restrictions on selling your property.
If you decide to sell within 10 years of purchasing through the scheme, you will be obligated to offer it to your former landlord, or another local social landlord.
The property should be sold for the market value agreed between both parties, but a district valuer can determine the price if it can’t be agreed.
There is an eight-week time limit for the landlord to repond to the offer, after which time you can sell to anyone.
Also bear in mind that you will have to pay back some – or perhaps all – of your discount if you decide to sell within the first five years.
In the first you would have to pay back the discount in full, with 80 percent in the second year, 60 per cent in the third, 40 per cent in the fourth and 20 per cent in the fifth.
Who can qualify for the Right to Buy scheme?
The rules around eligibility for this scheme can be quite complex.
There’s a handy eligibility checker on the Own Your Home website if you’re not sure.
But in simple terms, you can apply to purchase your council home in England if:
- The property is your only or main home.
- You’re a “secure tenant”, meaning a contract is in place with your landlord
- The property is be self-contained
- You have had a public sector landlord for 3 years, though this doesn’t have to be three years in a row
You can also make a joint application with:
- Someone you’re sharing a tenancy with
- Up to 3 members of your family who have lived with you for the past year (even if they’re not sharing the tenancy)
You may the Right to Buy if your home was council owned, but it was sold to another landlord, such as a housing association, while you were still living in it.
This situation is called ‘Preserved Right to Buy’.
If you think this might apply to you, consult you landlord.
You may still be eligible to buy your home if you weren’t living there when the council sold it through the Voluntary Right to Buy Pilot.
You can this Right to Buy calculator to find out how much of discount you could be entitled to.
