Ever since the 1980s, Right to Buy has given tenants the opportunity to purchase their homes at a discounted price. Some have hailed the scheme as a rip-roaring success, while others believe it has led to skyrocketing house prices and contributed to the current housing crisis. Whichever side of the fence you sit on, there’s no doubt that more people have access to buying their homes due to the scheme. But how, exactly, does it all work? In this guide, we’re looking at buying a council house and everything it entails.
What does Right to Buy mean?
Right to Buy is a scheme created by the government. It was designed to help social housing tenants own their homes by buying their council property at a discount. Those discounts can also be offered against upfront deposit costs, meaning anyone who can afford the mortgage may be able to purchase the property without needing to pay a deposit.
Who can buy a council house?
The Right to Buy scheme allows most council tenants to buy their home from the local housing authority for a discounted price. Only council tenants qualify for the scheme, however. That means you can’t buy a council home for a reduced price as a private renter or homeowner.
Can all tenants buy a council property?
Not all social tenants can buy a council home, although most probably qualify for the scheme in some capacity if they’ve lived in the property for at least three years. To be eligible for Right to Buy, you need to:
- Be a council tenant or have been one when the property was sold to a private landlord
- Have the property as your main or only home
- Have been a social tenant for at least three years
Other factors considered include:
- Not living in any sheltered housing or other accommodation suitable for elderly or disabled people
- Not having any legal issues surrounding debt
- No outstanding possession orders
- Must not live in a home about to be demolished
You don’t necessarily need to have lived in the same council home for three years, and the period doesn’t have to be continuous.
How does it work?
Council tenants who live in a house rather than a flat for three years or more get a 35% discount under Right to Buy. It goes up by 1% each year until the maximum discount is met (£103,900 in London and £77,900 for the rest of the country). Those living in a flat get a 50% discount if they’ve lived there for three-or-more years, with the discount increasing by 2% each year.
How do I apply to buy my council house?
The Right to Buy scheme involves four steps if you wish to apply to purchase your council property.
- You’ll need to fill in an RTB1 application form, which determines if you’re eligible
- Next, you should send the application form to your landlord
- The landlord will then give you an answer to whether they are willing to sell and must respond within four weeks
- If the landlord agrees to sell (they must explain why if not), they will send an offer. This includes the price they think you should pay for the property and how they came to that number, your level of discount, a description of the property, estimates of services charges within the first five years and any known issues with the property.
Once you receive the offer, you’ll have 12 weeks to respond and tell them if you wish to go ahead with purchasing the property. If you don’t respond within this time, the landlord will need to send a reminder. You have 28 days to reply to the reminder, or the landlord can cancel the application.
Can you get a mortgage on a council home?
The fundamentals of buying a council home are similar to any other residential property purchase. How you fund it is up to you, but most homebuyers use a mortgage. This means you’ll need to go through the same process as anyone else buying a property, even if they don’t use the Right to Buy scheme.
However, not all mortgage lenders lend on council properties. Or there may be restrictions, such as they won’t lend on a flat situated above a shop, regardless of it being a council or privately-owned home. It’s worth using a mortgage broker who can take your specific details and look for mortgage options matching your criteria.
Your home can be repossessed if you fail to keep up with the monthly payments.
Pros and cons of buying your council house
- Affordability – it makes homes attainable for people who may otherwise be unable to afford them
- Value for money – the discount you receive on a council home can be substantial
- Space – council homes tend to be larger than many privately owned homes, especially new-builds
- Deposit – deposits are cheaper with Right to Buy homes
- Financial stability – owning your home can offer financial stability and provides you with an asset
- No moving costs – because you live in the home already, there’s no need to move (known to be particularly stressful).
- Lender restrictions – again, some mortgage lenders won’t lend on council homes
- Responsibility – once you own the home you will be responsible for maintenance and repairs
- Reputation – in some cases, ex-council homes have a stigma and can be harder to sell. However, this is generally becoming less of an issue.
Having the right to buy your council house can be liberating and allows many to become homeowners. The process can be long, but that’s also the case with most property purchases. As long as you have all the relevant details and understand eligibility criteria, you can potentially buy your council home and get onto the property ladder.
Last Updated: December 19th, 2022