You are here: Home - Mortgages - Remortgage - Understanding -

Guide to Right to Buy

0
Written by: Your Money
26/04/2015
Right to Buy allows most council tenants who have lived in their council home for five years to buy it at a discount.

The maximum discount is £77,000 for anywhere in England, except in London boroughs where it’s £102,700. This figure will increase each year in April in line with the consumer price index (CPI). The size of the discount you qualify for depends on how long you have lived there, the value of the property and whether it is a flat or a house.

For houses you get a 35% discount if you’ve been a public sector tenant for 5 years. For every extra year you’ve been a public sector tenant, the discount goes up by 1%, up to a maximum of 60% – or £77,000 (whichever is lower).

For flats you get a 50% discount if you’ve been a public sector tenant for 5 years. For every extra year you’ve been a public sector tenant, the discount goes up by 2%, up to a maximum of 70% – or £77,000 (whichever is lower).

Your landlord must complete parts of your Right to Buy application within set time limits. If they don’t, you could get a reduction in the sale price.

Selling your property

If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either your old landlord or another social landlord in the area.

If the landlord doesn’t agree to buy your home within 8 weeks, you can sell it to anyone.

Paying back your discount

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

On top of this, the amount you pay back depends on the value of your home when you sell it.

So, if you got a 20% discount, you’ll have to pay back 20% of the selling price.

If you sell after the first year, the total amount you pay back reduces. You pay back:

  • 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

Rural homes

Your 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 have difficulty getting a mortgage to buy your home.

For further information, help and advice, click here.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week