Guide For Council Tenants Who Wish To Buy Their Home
How can council housing tenants benefit from the RTB scheme and what is it worth to them?
If you’re currently living in council housing accommodation, and you’re interested in purchasing your own home, then you might be eligible for the government’s Right To Buy, or RTB scheme. Those who are able to invest in this way can often purchase their home for significantly less than market value, with the amount of discount being dependent on a few key factors.
What Is The Right To Buy Scheme?
RTB is a property right which is detailed in the Housing Act of 1980. It offers eligible local council tenants the right to purchase the property they live in, thus getting their foot on the property ladder. The scheme is also available to some non-charitable housing association tenants, but this will depend on a case-by-case basis. If the home is your only property, and you currently rent the entire residence, rather than just a single room within it, then you could be eligible to buy. Other criteria includes the need to have been an eligible tenant there for a minimum of three years.
To make it easier for council tenants to afford to purchase their own homes, the RTB scheme offers significant discounts on the value they need to pay. If you’re trying to buy your council home within a London borough, then the maximum available discount will be £112,300 whereas other parts of England can enjoy a reduction of £84,200. A team of conveyancing solicitors Essex professionals clarify that the discount is linked to the Consumer Price Index, so will change in value each April.
Although these are the maximum available discounts, the potential savings for individual RTB applicants will be dependent on how long they’ve been a public sector tenant, the type of property and its current market value.
Another factor that will determine the value of your discount is landlord maintenance. If your public sector landlord has spent money on improving your property in the last ten to fifteen years, then this may reduce the overall savings you can receive. If your landlord has spent more on your property than the discount is worth, then it is unlikely that you would receive anything. However, you would still have the right to buy the home.
Buying With A Partner
It is possible to enter the RTB scheme with a partner applicant, but in this case the discount would be based on the person who has been living there for the longest period of time. Aside from this, you can apply for a mortgage with your partner by following the usual process for joint applications with your loan provider.
In the event that you purchase your home using RTB, and then subsequently decide to sell within 5 years, you may be required to repay some or all of the discount you’ve received on the property. You might also receive a smaller discount if you’ve used RTB on a previous property purchase. These points highlight that RTB is particularly suited to those council tenants who are hoping to stay in the same place for a prolonged duration.