A revamped Right to Buy scheme will offer council tenants in England up to £75,000 off the market price of their council home. Here's what you need to know about the scheme.
In a bid to help thousands of people "achieve the dream of home ownership" David Cameron is regenerating the Right to Buy scheme first launched by Margaret Thatcher in the 80s.
Tenants across England can now get up to £75,000 off the cost of buying their council home through the scheme, with the coalition government promising to replace each council property that's sold with new affordable social housing.
We look at how the scheme has changed and explain how you can benefit from it if you're a council tenant.
To be eligible for the Right to Buy discount scheme you will need to have been a council tenant for at least 5 years, although this doesn't have to be in one continuous period or just in the home you want to buy.
You cannot apply for a Right to Buy discount if any of the following apply:
Certain properties are also excluded from the Right to Buy scheme, usually if they are reserved for the elderly or for tenants who work in a specific public sector, such as firemen or the police.
For more information on the properties that could be excluded from the scheme, visit the Directgov website.
The maximum discount available through the Right to Buy scheme has increased to £75,000 for properties across England (£100,000 in London boroughs).
The exact amount you will get will depend on how long you have been a council tenant, whether you live in a flat or house and the value of the property you want to buy on the open market.
The maximum discount for a council flat is 70% of the market value, but the discount starts at 50% for those who have been council tenants for 5 years and increases by 2% for each additional year of council tenancy.
The maximum discount for a council house through the right to buy scheme is 60% of the market value starting at 35% and increasing by 1% for every year you have been a council tenant.
Regardless of how long you have lived in your home, or how much it is worth on the open market, the maximum discount on offer through the Right to Buy scheme is £75,000.
Although the maximum discount available through the new revamped Right to Buy scheme is set at a generous £75,000, the amount of money that will be deducted from your property could be capped by the Cost Floor rule.
This rule allows your landlord, in most cases your local council, to claim back money they have spent on repairing and maintaining your property over the past 15 years from your Right to Buy discount - even if you've not lived there the entire time.
If you purchase your home through the Right to Buy housing association you may have to repay some or all of your discount if you sell it again within five years.
The amount you would have to pay back would depend on how long you had owned the property when you sell:
The market value of your home when you sell will also affect the amount you would have to pay back, this applies whether your property has increased or decreased in value. For example, if your home was worth £100,000 and you got a discount of £40,000 only to sell it for £110,000 the discount would be calculated as £44,000. So if you sold it 30 months after purchase you would repay 60% of £44,000.
You may also have to give your original landlord first refusal on the property when you come to sell.
If you want to benefit from the Right to Buy discount increase and are a qualifying tenant you can start your application by downloading an completing the RTB1 application form on the DirectGov website.
You will then need to send your application to your landlord who will have four weeks to tell you if you can buy your home (eight weeks if they have been your landlord less than two years).
If your landlord is happy to sell you your home they will then send you a Section 125 notice.
This will contain a formal valuation of your property including the price you will be expected to pay.
It will also set out details of the new right to buy discount rates and estimates of any charges that will be deducted from your discount.
Once you receive your Section 125 notice you will have 12 weeks to accept the offer or reject it and continue renting your home.
Purchasing your home through the council Right to Buy scheme is very similar to buying a property on the open market, except the home owner (in most cases the council) is able to offer a substantial discount on the price you have to pay.
However, this does mean that you will need to apply for a mortgage and put down a deposit unless you have the cash to purchase the property outright.
Many lenders will offer mortgages specifically tailored to Right to Buy applicants, although you should carefully consider all you different options when looking for the best mortgage.
For more help read our guide: 10 Steps to Your Perfect Mortgage or compare mortgages using our Right to Buy mortgage table. You can complete our mortgage broker form to speak to an independent mortgage broker in your area.
Control over social housing is a devolved issue, meaning that the governments of Scotland, Wales and Northern Ireland have control over the Right to Buy schemes in these countries.
The Right to Buy scheme was closed to new social tenants in Scotland from 1st March, 2011.
This means that if you took up your tenancy for the first time after the 1st of March that you will not be eligible to apply for a Right to Buy discount.
If you left social housing and returned to become a social tenant after the 1st March, 2011 it is unlikely that you will qualify for the Right to Buy scheme either.
However, while the Right to Buy scheme has now been withdrawn to new social tenants in Scotland, if you took up your tenancy before 1st March, 2011 you will still qualify for the scheme and be eligible to receive a discount on purchasing your home, although these will be much lower than the £75,000 limit introduced in England.
The Scottish parliament will withdraw the scheme entirely in Scotland by August 2016.
For more information on the Right to Buy scheme in Scotland visit the Scottish Government website, or read this short Right to Buy Scotland guide.
To a large extent the rules governing Right to Buy discounts are the same in Wales as they are in England, however the maximum discount available in Wales is much lower at £16,000.
Additionally the Welsh Assembly has given powers to local authorities to suspend the Right to Buy programme in areas where they are short of social housing.
This means that you may not be able to purchase your home if your local area has suspended the programme.
For more information on the Right to Buy Wales scheme, visit the Welsh Government website.
While the Northern Ireland Right to Buy scheme allows Housing Executive and housing association tenants to purchase their home at a discount, the maximum discount available in Northern Ireland is £24,000.
Most of the other rules and regulations regarding the scheme are the same as in England, with tenants having to have been a tenant for a minimum of 5 years to qualify.
For more information and details of how to apply, visit the Housing Rights Service website.
Can anyone help. I was sent an offer for my rtb flat and they have now sent me another letter saying the price was incorrect and they would be sending me a new letter in the next 10 days.
To add to the above. When I first received my offer. There was a letter saying the work that would need to be carried out in the next 5 years and how much I would have to contribute. I disputed this as all of the work they claimed needed doing such as a door entry system, electrics etc, has all been done. I asked why they would do this all again in the next five years and they said there had been a mistake and that they would be sending me a letter with a new offer. I asked why this would be the case? Surely they had sent around an independent surveyor who said that the cost of my flat as it stood today was worth the amount offered? They said it was, but there had been some other errors. I suggested to them that as they'd already done the works on the letter that was proposed, they were simply going to add that price onto my offer. They said this was not the case. How can this be the case then if they sent round a surveyor and made me an offer. Can they do this? Any help or advice on this would be greatly appreciated. Thanks
Has it been resolved?
I am in the process of buying mine and they got the service charge all wrong. I questioned the council about building insurance as that was missing from the service charge (believe it or not). I now am being told that I have an extra £500 in cost of the building insurance and lift maintentance.
i would buy my house tomorrow,if wales was the same as england.we are not being treated fairly.8 years cash rent no incentive to keep working.there keeping us in limbo.
why is the right to buy discount lower in wales than anywhere else..surely this is discrimination???
The Welsh Assembly are currently reviewing their own Right to Buy scheme and are considering bringing it line with the English scheme I.e same discounts etc
i think the maximum discount in london is bigger than elsewhere in england. i don't live in london and i still find it fair. it reflects how much more expensive the properties are there.
Is it possible to take the right to buy discount and purchase a property in the private sector? How would you go about that? Thank you in advance.
No you can't.
Would I have the right to buy if I have a bad credit history and still owe creditors?
Ryem88 - On of the criteria on getting the RTB is that you cannot owe any money to creditors. This is purely because, like banks the council want to be assured that you are debt free and are able to pay the costs of your home. I don't think a bad credit history is taken into account by the council, however, if you were to apply for a mortgage, the bank who will be lending you the money will certainly take this into account - I found it hard enough getting a student account which gave me an 1700 overdraft due to bad history so you can imagine the dilemma when needing to borrow 100k+. Saying that, there are banks and mortgage schemes out there who are specifically designed for people who have bad credit ratings,you just have to shop around. Moneysupermarket and moneysavingexpert are good sources for this. Hope this helps
If I took a mortgage out on my council home would i have to pay a deposit or would they take the rtb discount into consideration
No deposit... Your discount is classed as your deposit. :)
You need to check. lenders such as halifax take the discount as a deposit, Barclays however still ask for a deposit on top of the discount.
Hi. We have just applied for a mortgage to buy our council house and have 53% discount . The mortgage advisor ( Halifax)told us we do not need a deposit and the right to buy scheme is the only way of buying your home where no deposit is needed. Hope this helps. Jo
Thats great advice thanks
peter kings i bought my flat. pros and cons, good and bad. did they tell you, you have to pay for your repairs, and good with making money last, to pay your bills. and you pay service charges. and very hard to get benefits. they only pay the interest only. for short time. PS you need to be good saving money. LOW PAID JOB IS OK, BUT YOU NEED TO BE IN A GOOD JOB, AND A TRADE, TO FIND WORK. REMEMBER ITS YOUR HOME. .
can someone share my mortgage with me? I am the sole tenant at my property. Sarah
If they have lived with you for the last 12 months you can add them to the mortgage and amend the section 125 to include the other person
if my debts are paid off first , and final settlements made with the creditors would i then be able to apply for the right to buy
It all depends on your credit rating-if its o.k. again your bank should be happy to proceed Phil,
Another question, Ive finally applied for my rtb but Im after an idea of the initial cost, solicitor fees etc.I want to try and put some money aside but have absolutley no idea how much its going to cost. (im talking for the surveyor etc). Can anybody help ??
all depends on the property price,it could be anything between 450-2000 quid
I am paying £900 in total
I have accepted the offer of right to buy, but now find out the discounts have been incresed. Can I now ask for the higher discount ?
I dont normally comment, but I can tell you "YES" you can ask for the higher discount that came into effect this year. Be aware that it may change the initial offer as the council may try and cover new cost. By new cost I mean if they think the value of the property has gone up ( depending on when you got the offer) the council may consider to survey the property again if they think the prices have gone up, and then apply the new discount. However I have a friend who got the new discount last year without any other changes.
My advice is to write to them and request for the new discount. I think Writing is better because you can keep a reference.
hope that helps,
Hi, I applied to purchase my property under the Right to Buy scheme but my council has tried to block the sale. I have served two notices of delay unsuccessfully. I want to appeal to the secretary of state. How do I go about it? To date, the process has taken 17 months
Hi we applied for rtb in my husbands name only.after accepting the valuation I also needed to be on the morgage buy council wont change this. They say I have to reapply. Can anyone help?
I don't know if you got this sorted already but some councils will add the name back on for a small admin charge
Sorry I can't directly answer your question, but can I ask, was the valuation of your property expected as the market value or was it lower than you thought? I too am looking at RTB in London and on the borderline if I will be able to afford it. I looked on Zoopla and it says around 250k although the local houses are being sold of 280 or 290k and if it is that price I won't be able to afford it even with the max discount of 100k..
Yes it was at the right price although I did dispute it and got another valuation from the district valuer. I got 5 grand off. Zoopla under values properties and is not always correct.
i think it's the way zoopla do their calculations, two identical properties in the same street but last sold 15 years apart end up with two different values as they use the last known sold price to calculate present day value.
Hi, If I buy my rtb house can I rent it out
You can after the first 5 years have elapsed, otherwise you would have to repay some of your discount back within the first 5 years
I'm not sure. I think maybe you can.
You can rent it out providing you ask permission from your morgage lenders.
Hi Saiqa its Kane - remember me?
Sorry no...... Do not know who you are.....
We were served a notice of the offer of right to buy under section 125 by our housing association for the sale price of 31000 signed by their solicitor however on accepting this offer the association being Helena housing has come back with a change in price of 32400 owing to an error on their part of calculating the discount . Are they allowed to do so or do they have to honour the initial price that we signed and accepted for
This is a grey area in term of the value and a S125 notice and at some point it will end up at the Court of Appeal or Supreme Court but from the cases I've seen it appears they can at the moment. There is provision in the legislation for correction of mistakes and it appears to be OK for them to do it to correct the discount.
What happens when the bank under values your property than what the council had valued at?
That means your Bank thinks it's worth less than the Council estimates. Either the Council is wrong (too high) or the Bank is wrong (too low). What do you think? You can appeal (against the Council's decision) if it's the right thing to do. Check values in the same street or nearby.
Hi there,Is one entitled to extra discount if they have also lived in another council property before? For example, I lived with relatives for over 20 years in our council house ( family home) and was given a council property where I have lived for the past 11-12 years. The reason I ask is because they have based the discount on my secure tenancy only at the property I live in now and not given me the maximum discount and Im sure they should have given discount on my previous address.
I lived in my council flat for about 9 years and was offered full discount.
It's based on YOUR tenancy or that of your spouse or partner. Not a relative you aren't "living with" even if you're in the same house.
Mogardo/ hi , I have lived 3 & half years on my council flat , with new rules I can buy it , now how much the discount well be regarding that a similar flat it's for sale private at £ 179000 - and if I apply to buy and have a estimate from the council , how long do I have the deadline on that estimate ( thanks in advance )
Your qualifying years do not have to be continuous, in other words you can add the years up to gain the maximum discount
Hi I have been a tenant for 6 years but have been told I don't qualify for the right to buy as it was after the 2005 cut off date, I have been told I only qualify for a 'right to acquire' which is a flat rate of 10,000 off the current market value. Could anyone tell me if this thread is meaning that they are bringing the right to buy back for later tenants? Thanks for any help
Hi, if you were in a council tenant prior to this date you may have the preserved right to buy.
Hi, we are just buying our house and wondered if we are aloud to rent it out once it's ours, nationwide are happy with our plans and said they give us consent but is there council rules or law against it
hi, as far as i have researched, the answer is no, u can only claim for your time in the council property and u or ur partner (if applying as a joint applicant) had to have been a secure tenant to qualify.
Hi I hope somebody can help me. I first became a council tenant in 1995 and was with the council until 1998/99 we then moved into a housing association property until now. We have found a council house tenant who wants to exchange with us and we are due to swap soon. The question is when we decide to buy our council house will we get a discount on our time with the housing association as well as the time spent with the council . Ie if we were to buy now would we get 3-4 years or 18 years?Thanks in advance
I have been a public sector tenant for 15 years I live on council for 5 years then on a housing associon for 10 years now going back to council have I still got the right to buy and how long do I have to live in the property before I can buy it
Me and my neighbour applied to buy our flats from our landlord through a preserved right to buy. We think the cost floor calculation is too high (£85k). I asked the landlord to provide me a breakdown of this cost but it has been 3 month now and I still didn't get any reply. The reply my neighbour got says "recent major works runs to 23 pages, cost floor calculation was assessed and approved by several staff members in our Finance team and we have no reason to doubt their validity and we will not be providing any further details".
So I want to know if it is our right to ask them provide us this cost floor breakdowns?And I saw the "cost floor rule in Scotland" (http://www.scotland.gov.uk/Resource/Doc/1035/0041347.pdf ) it says the cost floor calculation even need to be certified. Do we have the same rule here in England?
You could appeal the decision by asking for a second opinion from the district valuer and you may also be able to apply for a RTB 8 for the delays you have encountered
Can someone please explain this. I have been a housing association tenant for 15 years, never a council tenant. I do not have the right to buy under the old scheme as the cut off was 1995 in my area. I also do not have the right to acquire as my property was built before 1997. Do I have the right to buy under this new scheme? According to the criteria listed above I do however looking at other websites, apparently I don't. It's very confusing.
Hi, I am thinking about buying my inlaws house for them. They have stayed in it for 35 year's.how much discount roughly will they get it for and roughly how much?? There house is probably worth 60000 on the market. I have got 15000 saved up however Will I be able to get a small mortgage under my name if im a bit short as they wont get one due to age.
Hi if the house is eligible for the right to buy scheme I.e council or HA you will have to of lived in the property for the last 12 months to be eligible to transfer the discount across to yourself so that you can purchase the property via a mortgage.
Hello. Can anyone help me. Would a lender know if I was buying my home through the rite to buy scheme when they do their checks. I cant put a lot on this page due to proceedings currently taking place against my lender. Thankyou
Can anyone tell me if I would be eligible to rtb. I've been an Tennant of an ha 5 years. Not a council Tennant. Thanks
Hi, you are more than likely eligible for the right to acquire instead
The sale date for our RTB was supposed to be today but the council has charged us rent for this week, does anybody know the final stages of a RTB. We went to the solicitors and paid our fees and signed the transfer on Saturday. Any help would be appreciated. Thanks
Hi woody 123, councils normally complete RTB's on a Monday and normally charge rent upto that date when working out the final purchase price
Thanks for the response, its all gone through now, I think the councils( legal side of things) were dragging their feet a bit !
Right To Buy is not for everyone. It will work for some but will be a disaster for others because they will be incurring a long term debt of which they may NOT be in a position to pay not to mention other hefty costs such as maintenance.
The Goverment are now looking at reducing the qualifying years down from 5 years to 3 years
Hi. can someone please advise. my partner has 8 years council tenancy to go towards our RTB discount but we are looking at swapping properties which would move us to a neighbouring coucil. My question is, if we were then to buy that property, would his 8/9 year discount from the council we are with now be carried over to the new council?thank you
yess your years go with you
I think it would be best if you asked your local council if your partners qualifying years as a council tenant is portable to another property without them losing your right to buy status.
I know you can take them to another property within the same council area, I just don't know if you can take them over to a different authority. I.e from say Norfolk council to a Midlands council?
Hi jemmac819 as a precaution and so that you do not lose out please confirm it with them first.
Good advice to check your position with the councils concerned prior to,moving
if i want to buy my house out right do i need a solicator
You may need them to assist with conveyancing, but if you do decide to go it alone then be very careful.
thanks for advice
You're welcome. :)
Hi if I buy my rtb outright can i rent it out to a tenant as soon as it's completed
If you buy your home in cash I cannot see why you could not rent it out as you would not have any mortgage attached to it, hence no lender to gain consent from.
On the other hand the council or housing association may decide to put conditions in the covenant stating what you can and cannot do, please don't give them any ideas.
It may be best to get direct advice from the council involved about renting out your home after you have bought it and make sure that you keep a record of all letters, meetings, valuations and costing's.
Please bear in mind also that if the council became aware of your intentions to rent out the property as soon as you buy it they may not be so generous with the right to buy offer. Hopefully all will go well. :)
Hope this helps.
Hi Sandz, you could but the council still has an interest in the property for 5 years due to the discount they have given you, so you would have to understand your obligations before renting which your landlord will provide
if so anyone recomend a good solicator
Hi and welcome. If you can't find one by personal recommendation, then you could look here
any advice how much a solicator would cost if buying outright
Hi, it varies from area to area, if I were you I'd contact a few locally and ask them to quote
Hi can anyone help I'm ha and swapping to council (dads house) he's been there nearly 29 yrs I've been ha for 12 yrs does his discount transfer to me taking on his tenancy and if so is this immediate or do I have to wait? If so how long?
Hi, once you have lived in the premises for at least 12 months then you can share your Dads discount entitlement.
my partner has a council house for 2 years and applied for the right to buy which was accepted last month, i live in this house (1 year 2 months) but not on the tenancy (was told this would change the right to buy to right to acquire)
Her credit rating is terrible and her wage isnt great which will make a mortgage difficult,
Can i also apply for a mortgage with her even tho im not on the books. My bank seem to say the mortgage can only be in the tenants name
Hi, you can add yourself to the RTB1 as a family member and ask your partner to complete their details within the form to say that they don't want to exercise the right to buy, liaise with the council then to ensure that the section 125 offer letter is in your name.
Hi can anyone help? We are getting frustrated by our council. It took them about 10 months to respond to our application for the RTB and when we sent our response, our mortgage application was approved within a couple of months.
Now the council has not responded to our solicitors despite 2 correspondences since October. I have tried the council many times myself just to know what is going on but we have met a brick wall. I am worried that our mortgage offer might be withdrawn by the bank(not that I am sure if that will happen). THe council is claiming our file has been passed on to the legal dept and everything just seem to be dragging on for too long.
Can you please advice the next step to take in this situation?
Hi can anyone help with my query plz. I am a council tenant of 12 years and about to apply rtb.i know sum 1 who has applied to buy there home,council has valued it at £125,000.It has no fitted kitchen,bathroom hardly any work done to it.private Houses on same street r going for this price immacutely done inside and out.why do the council valuate your house at the same price of houses which have been renovated to a high standard. Thanks
Can anyone help. I live with my mum in our council house for 22 yrs, she is nearly 60. As her child , do I have the ability to apply for the right to buy scheme in my name only?
Hi Mthatc, If you are on the tenancy then you could try to remove your mother's name if she is happy to do this, but if not you could apply for the right to buy as a family member if you have lived there for the last 12 months.
I been in my council house for 10 years do I have the right to buy?
Hi Hannah1, If you are on the tenancy you will have the right to buy, if you are not on the tenancy then, as long as the tenant does not object to you using their discount to purchase then again you can buy it the discount if it is an house would be 40% of the open market value
Hi my mum has lived in her council house for 30 years. Would I be able to give her the money to buy the house outright to have it in her name and live rent free?
Hi, I was wondering if I saved enough money, can I buy my council house in one go? Because ihave heard that council won't take cash to prevent money laundering. Is that true?
Hi ,can I buy my council house if I save enough money to buy it? ? Because I heard that the council doesn't accept cash, in order to prevent money laundering, is that true?
Hi Beyden, you can pay cash for your council house no problem. The council will do fraud and money laundering checks to see that the source of the funds are coming from you or somebody living with you and not some unscrupulous property magnate trying to have away with your equity.
hi can anonye tell me if its possible to get a interest only mortgage on a right to buy flat?
Hi Alan80, Interest only mortgages are quite hard to come buy these days due to affordability checks by the lenders, although you can still get them. Normally it is best to go through a broker who can navigate the lenders underwriting requirements a little better.
Ive lived in my council flat for ten yrs ive been approved for TRTB and will have it surveyed this week.How long does the process take after my flat which is a house conversion to go though ruffly? Also what the best bank to apply for the morgtage with seeing as the deposit will be covered. Thanks
Thanks, also would i be able to take out extra money for home improvements?
Hi Sabrin80, the process from start to finish for the Right to Buy normally takes around 3-4 months subject to you having a good understanding of how you can help the sale along i.e liasing with your solicitor, council and lender. There are a number of high street lenders who will offer 100% of the discount price.
what does it mean owe money to creditors, i wish to buy my council flat but i have a car on a 3 year contract plan.
That's not a problem as long as you have got the affordability still to afford your mortgage payments and associated costs.
or does it mean those with iva are not allowed but those with bank loan, store card etc are fine
are you currently in an iva or is it paid off?
I'm now going for thr rtb I've lived in my house 7years but was in another council house 7yrs previous so do I get 14yrs towards the house? Also my husband was a council tenant but in another district could we use that too? Thanks
Hi hayley8, yes you can add your discounted years together for yourself to apply for 14 years discount, although if your husband has over that then you can use his to gain a better discount. You cannot add his discount to yours though unfortunately.
add your response here
Hi, I'm going through the RTB process and it's been in conveyancing since 1st Nov last year (4 months) and the landlord's solicitor says the earliest they can complete is 31st march - which happens to be the day my mortgage offer runs out (and I'll be returning from a holiday that day). I'm amazed how long it's taken. the mortgage lender has already told me if it's not completed by that date I'll have to reapply for a mortgage - will I be able to claim any financial losses from my landlord as their solicitors have taken so long) and can I complain about how long they have taken/ thanks. neil
Has the lender said why your application is taking so long?
Hi Angeld - thanks for getting back. Its not the lender - they approved my mortgage before I instructed my solicitor in November - it's my housing association's solicitors who are dragging their heels with their side of the conveyancing that is the cause of the problem - I'm concerned that S******** won't allow me an extension on the mortgage offer. N
Hi Neil, sorry to hear about your delays, you are not alone it happens quite a lot presently due to the overwhelming response local councils and housing associations have had due the reinvigorate right to buy scheme which is having a knock on effect for all of the schemes. The lender will let you extend your offer but may insist that you send them up to date payslips, bank statements or working tax award letter.
Hello , I'm looking to buy my council home and wanted to know if anyone can advise of any banks or mortgage lenders who accepts the discount as the deposit . I know Halifax would but wanted to see if any others does. Many thank
The key is knowing that you and your property fit the lenders lending criteria
You will be glad to know that there are a few more who will offer you a mortgage where they will accept your discount as the deposit, there is Santander, Halifax, Skipton, Leeds, Market Harborough, Principality + more
hello people i have had my house valued and im quite happy with the price only problem is im working 16 hours and banks will not accept that how wil this work for me :(
Hi I have been a h/a tenant for 15 years and am now moving to a council house, will I still qualify for 15 years discount if I decide to buy the council house or will those years not count?
You will be able to use the years you have been in any social housing which includes HA towards your qualifying discount in the council property.
Has anyone had any experience with RTB after succeeding a tenancy? The chap at the Council said the situation is a grey area and although he came back with some answers, he didn't seem very sure when I questioned about what the RTB application said about applying for RTB and having lived with a parent and succeeding their tenancy. Im trying to clarify how the criteria is set in this situation.
I think sonar were you on the rent book with your parent, if so then once passed 5 yrs, changing to 3 yrs come autumn new rules you can apply to buy. if you werent on rent book and thus you have to start 5 or 3 yrs as a secure tenant.
Now heres the biggy, i have spend many weeks reading numerous articles and it seems right to buy ina leashold makes no sense, heres whysay you have only 94 yrs of lease available as previous tenants bought back in 1984 in your block, thus a bad move, and say you are 45 and pay £64 a week in rent, this covers free repairs, all services and the right to live till you die,now if you become pensioner in 20 yrs you claim housing benefit, make sure you have no more than £10000 in savings and state pension only, you will have paid say £65000 in rent and no you become rent free with housing benefit.but if you bought you would say get a 70% discount but thats prob a £30000 mortgage over 20 yrs so same price as rent if interests rates stay at 5%, BUT you will have to pay £1000 a year service charge,stair cleaning, pipe repairs, electric cable repairs, roof tile repairs , plus ground rent, plus life assurance, and the biggy major works, most council as self funding and can claim what is reasonable, and as the property is usually say 50 yrs old , say a 1960s low rise flat, it is due for lots of upkeep, and i estimate £5000 every 5 yrs for your life,plus if you wanted to sell in 15 yrs time the price to extend lease would be huge, basically a lease gives you the right to live there and not pay rent but with all the overheads of repairs, major works, service charges, mortgage interest.etc were as you rent service charge is about £40 a year for stair lighting, cleaning ONLY, so your 65 and paying big service charges major works, life assurance but your nieghbour is 65 too on housing benefit, free repairs, no life assurance,ground rent, lease extension cots,government pension and sitting pretty enjoy the same view out their window as you.right to buy makes sense if it is a new property on freehold, THUS impossible. in real terms it is leasing with basically 25 yrs worth of rent upfront with interest from banks mortgae an old ford cortina for pennies with huge repair bills or dont right to buy and get the cortina repaired for free via rent when your old. and maybe the council will update this cortina to a new nice sheltered home when the transfer their sock to a housing association in later times.right to buy only helps social mobilty, you buy you sell to a town that you fancy as its almost impossible via a mutual exchange and thats the only benefit, but you sell old hard to mortgage 60 yr old council place to buy another 60 yrs old council place in another town with all the lifetime costs ahead of you.My answer is rent a nice new housing association place ina area you love.but if not rent council and try try get an exchange to another town you fancy, please dont buy. ps remember if you buy, the council gets rid of its liablity to keep on spending on repairs that it will never get via rent, thye love leaseholders, they get £000s to extend your lease and the government doesnt have to pay housing benefit and banks make money via interest, now do you see why the government want to increase discounts and get rid of their 60 year old ford cortinas
Thanks Hiya.. I was not a named tenant as the LA said I couldn't be as they only allow joint tenancy change if my mum had a new husband or a live in partner who had resided at the property for 12 months. So I was just added as part of the household. That would be 3 years this June. The RTB application has a section which states..... "A tenant who has taken over a parent's public sector tenancy may be able to count for qualification and discount periods after the age of 16 living in a property of which a parent was a public sector tenant" This is a freehold property and Ive not made any decisions about if I would ever apply for RTB but would at least like to know where I stand and if I'm eligible or when I am. When I succeeded the tenancy all I was told is that I take over the exact same tenancy my mum had from 1994.
please note you can take over tenancy if the property suits ur bedrooms needs if not u can be out on ur ear, my brother in law lives with old parents in a 4 bed house, if they die he will not be allowed to succeed to such a large proerty
also do u want to take on liability for an old council property via right to buy, id rather wait it out till property got so old that council build new home or trasnsfered stock to housing association and I moved to a new build, then became rent and repair free as a pensioner.after all folk don't want to buy ex council properties via sales, the fear lack of available mortgages, resale risks, repair costs, do u want that old Cortina or just wait till u can rent interest free on that new vw golf.the only way to win is sell up at 5 yrs to a buy to let person, let them take the grief of repairs and potential low sale and buy a new build house in somewhere like Scotland for the same price when u retire and don't care about job prospects, u just want nice new home with little repairs or leasehold worries, it feuhold for flats in scotland
so are you like me who used to be renting a lovely new housing association flat lifetime assured tenancy £15 more than council rent that was all modern and highly insulted in nice area of new builds to be offered a swap to a 60 yrs old council property with right to buy,I jumped at the chance to buy my old council cortina, now i wish i could turn back time, lucky i didnt buy though.I guess my £15 a week savings goes on the gas and elec bill now.I dont want to be 70 yrs old and getting hit with new roof bills, new heating systems on my 80 yr old ford cortina at that point in life it will be if i use right to buy.there is one other way out, buy your right to buy, sell in 5 yrs before any major works to a right to let merchant, take the cash go and buy a new freehold house or flat, its feuhold for flats in in scotland for same price, this only works if your moving from say bournemouth to dundee. and your retired and dont care about employment prospects, you just want a nice newbuild free or fuehold property and dont worry about the roof needing replaced in next 5 years at councils demands and their prices.
its like the reasons noone wants to buy old car now, they are a money pit with low spec high mot and low mpg,folk want new economical cars with warranties and low tax, mot and high mpg. i see buying an ols council property as buying an old banger cos it was cheap, it makes more sense to get the new car on a contract plan with maintanence with lifetime redundancy cover included, eg rent a new build via housing association. that has housing benefit, full insulation, good design.
Quite a few council properties have been renovated recently under the Decent Home Standard 2010 legislation i.e new roofs, kitchens, bathrooms, heating and insulation which does make them quite efficient.
I disagree with the insulation comment, my council flat is 50 yrs old and does no have the ability to have insulation placed between walls. and it does have new kitchen boileretc, but again in 10 yrs time council will replace prop at a cost of £15000 to leaseholders.remember a lease givers you the right to live their for say 90 yrs, say your 45 with 20 yrs discount , you buy, will you live till your 135, with constant bills for upkeep, servicing, insurance, renting is the same as a lease you rent for the period till you die but no interest, no repairs,I believe in pay as you go in life,rent, not buy something like the air space in a flat for the next 90 yrs.
Yes I understand all that comes with owning the property and having to foot an repairs etc and Im just looking into all my options. I have already succeeded the tenancy and am ok to stay as we are still overcrowded for the bedrooms we have, but the kids can share a room for now. I have been looking into an MX but haven't had too much luck. I spoke to a neighbour who bought their property long ago from the LA, and extended it to add the extra bedroom they required. So I was just seeing if that might be a possibility for us. So will my previous years being a household member count? or does the clock start ticking from when I signed the tenancy in my name? The RTB for suggestions I should be able to, but its not very clear.
if you put your rtb1 form in with all the years you were a paying tenant i guess the council will work out discount, it doesnt cost anything to apply, was your name as a household member liable for rent, if so maybe it counts. also is your job safe for next 25 yrs. if i was doing rtb it would be ona freehold and i would wait 2 yrs to see property fall 40% and also save to apy at least 30 % up front and have at least a years worth of mortgage, insurance, upkeep in the bank for rainy days
I think the most valuable comment in the guardian report is those mortgaged with right to buy are in a more vunerable position than those that continue to rent from council.
so basically the report highlights the current uk and previous governments attitude that you must get in housing ladder to avoid insecure private tenacies, BUT if you are a secure council tenant then there is no need to get on housing ladder to avoid insecure tenancy!!!!!
With the state pension dwindling and the onus now on the British public to fund their own retirement, the pressure's on to save enough money to live off week in, week out. For retired renters, who have no choice but to continue paying the going rate for rent after finishing work, this can present a much greater stumbling block than for home owners.
Whilst only 15% of retired renters say they've never bought simply as a lifestyle choice, over two thirds say they've never had enough money to cover the deposit on their first home, and over 40% simply can't afford the cost of ownership. The ability to purchase your council home through the Government Right to Buy scheme does present a great opportunity for those people who otherwise might struggle to find their way onto the property ladder.
But just how much can home ownership relieve the pressure further down the line - and is it worth it?
The beauty of home ownership
Probably the most widely-stated benefit of home ownership is that unlike renting, the money you pay is an investment into yourself. That is to say that when you've paid off your mortgage, you are in ownership of a valuable asset. Providing you manage to pay off your mortgage before the time comes to finish work, then you'll find yourself with very few outgoings left to pay to keep a roof over your head during retirement.
In addition, findings from a recent study by financial services specialists, Prudential, that retired renters pay an average rent of £423 per month, which is two thirds more than the average mortgage repayment paid by those retirees still with home loans. In fact, the annual cost of rent is estimated to account for nearly a third of the expected national retirement income of £15,300 per annum. In a nutshell, renting drains retirement income.
Giving yourself the gift of choice
Although not the ideal situation, some people get to retirement and need to unlock some cash to cover day to day expenses. Around 42% of retired renters are former home owners who have made the decision to sell their home, and the majority of these have done so for financial reasons, including:
40% to pay off debt19% to cover the cost of divorce or separation16% to either help their children get on the property ladder or support them financially via some other means9% to boost their retirement income.Having a home to sell as you approach retirement gives you the financial freedom to make the choices that are right for you.
Finally, one of the ways people maximise on their investment in property in later life is through buy-to-let. This usually involves down scaling and renting out the initial property to fund both the rent or mortgage repayments of the smaller property from the return.
In fact, at present, growing house prices and lucrative buy-to-let yields are making this a more attractive prospect for many than investing their money into a pension pot. In fact, a recent poll conducted by the Observer newspaper found that of 1,500 people asked, a third planned to receive retirement income from one or more buy-to-let properties.
The discounted house prices available to tenants eligible for the Right to Buy or Right to Acquire schemes mean that this could be a lucrative option for bringing in extra money during later life. However, becoming a landlord is not a decision to be taken lightly. Between finding someone to move into your property for the price required to fund a second home, and keeping up with maintenance and repairs, it can be a stressful and time-consuming job. Before committing, it's always advisable to contact an independent advisor who can help you through the decision process.
Whilst home ownership can massively relieve the stresses and financial constraints of later life, it's also a big investment that requires a lot of care and attention in the decision making process.
I'm making an application for RTB and I'm worried about the cost floor rule reducing my discount and therefore making this an unaffordable venture for me. Just over 5 yrs ago the council had renovated our estate under the Decent Home Standard 2010 legislation i.e new roofs, kitchens, bathrooms, heating and insulation. I know that the leaseholders were charged with over £20,000 - and that's without new bathrooms, kitchens etc. I also know that they contested this and were successful in not having to pay this. Q1: Would this come under the cost floor rule? Q2: Could I contest this as the other leaseholders did not pay?
Q1, YesQ2, No, sorry the cost floor cannot be contested and in the case of the leasholders you mentioned, I assume they did not have to pay the charge as they had not benefited directly from the improvements, if the work had been carried out on shared communal areas then the charges would stand.
I would still apply for the right to buy and see what price comes back.
The leaseholders were charged for the shared communal areas improvements e.g. roof fixing, railings repaired and painted, new communal flooring etc only as many of them opted out of the bathroom/kitchens renovation and they contested the charges (over £20,000) and they were successful in not paying these charges.
Hi Maisy, Your discount may be reduced by a special rule called the cost floor. This may apply if your home has recently been purchased or built by your landlord or he has spent money on repairing or maintaining it. Under the cost floor, the discount you receive must not reduce the price you pay below what has been spent on building, buying, repairing or maintaining it.
If the cost of works carried out over the 10 year period is greater than the market value of your home, you will not receive any discount. This period is 15 years if your home was built or acquired by your landlord after 2 April 2012.
If you are buying under the Preserved Right to Buy, the cost floor period is 15 years regardless of when it was built or acquired.
Hi - is the discount going to change for rtb in wales
Hi Yanto, this is currently under review with the Welsh assembly
i read the comment from righto buy coop and it was taken directly from a newspaper article i read recently, I have to point out that when mortgage free at 65 you are not debt free, look at the number of right to buy leaseholders hit with bills of 20, or £30000 or above for new roofs etc on a 140 a week pension.what do they do sell up get £60000 for their flat with 65 yrs of lease left and rent at £130 a week on a 6 month short hold assured tenancy from right to buy landlord, moved about and who wont take housing benefit as on a pension you claim housing benefit.it seems that if you pay 30 to 35 yrs NI stamp you will get your pension the government cant take that away legally, then you legally get full housing benefit also with no worries of repairs and get to keep your pension, a couple getting 140 a week each and full housing benefit on their council flat seems like a pretty wise choice, remember the more you pay into a private pension and get when your 65 the less housing benefit you get.
Hi, with response to the previous comment regarding our copy being from a news article, this is incorrect as it was written by ourselves.
I fail to see how you state most retired renters pay £423 a month rent, my flat is £61 aweek and i will not pay when im 65 as i will get housing benefit, why does these renters paying 423 a month fail to claim for housing benefit.as for when mortgae free you have little outgoings --wrong, you have insurance and potential horrendous major works costs in the pipeline.Ive worked out 34000 loan for my flat paid till i retired 55000 total repaid if interest stays low,plus 700 a year service charge, redundancy cover, life asuranceversus rent total till i retire with increase of 1% £64000, £50 a year service charge, no redundancy policy or life assurance, then full housing benefit at 65, no fears of further 30000 bills when retired leaseholder.
Hi, you seem to have a great knowledge of the right to buy product which is great news for forum members, keep up the good work, it may also help people if you provide 3rd party sources to back up your claims.
can anyone advise why houses now get 70% discount but flats wont raise to 80%.as flats got 70% as they are leasehold and hence only have a limited lease and liable for all repairs set at council hourly rates.where house owners choose when to repair at their choice of tradesmen or repair it themselves. my housing officer said that was why flats got 70% cos they have higher future overheads.i was shocked to see government wont increase to 80% as they know flats have these service charges, major works costs to pay for.
this article shows basically if you get basic state pension and housing benefit ina council property you can be as comfortable as someone who has to raise £100000 private pension and has toiled away with a mortgage.your point about pensioners selling up and renting is when they own large desirable homes(not ex council flats in a scheme) and move into retirement homes or rent from private landlords or buy a caravan or canalboat.but for the rest of us if we buy our 2 bed council flat in hull, liverpool, etc what can we get for it when we retire let alone find a buyer, and were are we going to move to.I considered buying my leasehold flat and sell up when retired , all i would be able to do is buy to another small ex council flat in another town, which at that point the flat will be 80 yrs old and prob in need of constant repairs.if i sell up, what cash i will get will only last 6 or 7 yrs private renting, then what, i say to landlord do you take housing benefit, not likely, very few private landlords take housing benefit, councils, housing associations are the best landlords as we know.where as if i rent i get the knowledge i can stay they in a secure tenancy, housing benefit, no repairs and also put a bit a side every week from my gov pension for holidays etc.
A short article on those buying flats
Great checklist that gives you some very useful information on the legal side of a flat purchase
another article debating whether to buy and retire with private pension OR rent council and retire gov pension
Hi I wonder if anyone could help I have been with a housing association 10 years And mored into a council house what is a housing association now for the last 2 years do I have the right to bye
Heres a dilemma, housing benefit bill for gov is large not due to the low rents in council homes, but high rents from private landlords, why cos over inflated house prices from banks lending up to 6 times your wages. hence landlords need high rents to cover mortgage.the more social homes built the lower the housing benefit bill as folk can avoid private lets.also a retired couple has higher allowances than a working age couple where one partner works, its 224 a week for a retired couple before they pay towards rent or council tax, a working couple its 112 a week, also retired can have up to 10000 savings against 6000 for working age couple.so what do you do, buy council flat, then retire with no housing benefit, and pay for upkeep, service charge major works or retire dont buy, keep your couple 224 a week pension and rent free, maintenance free.or do you buy and sell and live off profits and rent private as there is little chance of ever getting a council home again, then move from flat to flat every 6 months whilst landlord says no housing benefit applicants. a worry.remember if you buy either open market or right to buy, it is one less housing benefit bill for government for when retired. unless you sell up and spend gradually then claim LHA on a private let when older,gov wont be keen on that.same with 2014 budget allowing you to get ur pension from 55, spend then claim benefits when retired, after all its ur money, ur forced savings when you worked,you have the right to spend it gradually and sensibly till u retire and if renting then, claim housing benefit.IMO the ones sitting pretty are pensioner couples in council homes with no more than 10000 in bank getting 224 a week pension and paying no rent and very little council tax.
remember in life you never truly own anything, you are simply "hiring it" be it renting or leasing or owning for your time on this planet, with the knowledge that you hand it back to the next generation in a better condition.it is the first generation that makes the true sacrifice by making the hire eg the mortgage in the belief that future generations can continue using this hired product eg home after their time on earth has passed. someone has to start the ball rolling, you or your parents so the next generation can use the hired home without the need for a mortgage.or do we just pay as we go in life, eg rent!!
if and only if the pay as you go attitude in life works out more expensive eg high rent and for some crazy reason gov bans housing benefit in the future for anybody(unlikely) and the mortgage "hire it" attitude may work out better. you have to do your sums. and of course if you have no children to pass on your hired home comes into play too.its like going into a car showroom and salesman says this expensive car with 25 interest and maintenance will last 60 yrs and your children can use it when you die and you say im 50 no kids ,a cheap car interest free and full free repairs and and a bus pass will suffice.hence maybe renting is better.
an article discussing what right to buy did to communities. Interesting.
The above article on the Right to Buy dates back to 2008 and does not take into account the latest re-invigoration of the scheme in April 2012.
this article looks at the good and bad about right to buy with tenants that made money and tenants that lost out severely and what benefit or damage to the community the right to buy did.Interesting!!
I have been a tenant with a HA for the last 26 years - do I have the right to buy?
Hi, was the property previously a council property?, and if so was you a tenant of that council?
Hi, I have been a tenant at my fathers for 3 months. He has the right to buy as he has been there over 15 years. Can i do a joint applications with him now?. I know if i was living there for 12 months i would be able to do so, however i'm only 3 months there, but i am on the tenancy and don't want to wait 12 months to do a joint application. Also i was there in the past aged 16 to 23 (7 years) but then i left for several years rented privately and only now returning.
Thanks for your help in advance.
Hi Seeker2, That will be fine as you are a joint tenant and you want to share the discount with your father, if you have any problems just drop by our website at http://www.righttobuy.coop and we can offer you free help and advice as we are a non profit that specialises in Right to Buy, best of luck.
Thank you for the prompt response RTBC. I will definitely drop by the site and get in touch if i have any issues.
hello, please can someone respond to me urgently as my deadline to make a decision is in in a few days. Please can you tell me if it is worthwhile having a district valuation? is it likely to be lower than what the council has valued the property at? My property needs a full modernisation and I feel the council may have valued it slightly but I am a bit worried in case the district valuer estimates the valuation higher than the council and I end up paying more for the property. Please can someone help. Also is it worthwhile having a survey done before proceeding with the right to buy? Thanks.
Hi sahaz_4 how did you go on?
Be the first to find out about the hottest bargains, biggest freebies & best deals each week! Terms & Conditions
Copyright © Dot Zinc Limited 2014. All rights reserved.
money.co.uk is a trading name of Dot Zinc Limited, who are authorised and regulated by the Financial Conduct Authority.
FCA Registration Number 415689.