If you’re a council tenant in England, homeownership could be a very real possibility thanks to the Right to Buy council house scheme.
If you’re a council and housing association tenant, the scheme could let you buy your home at a massively discounted price. First introduced in October 1980, it’s led to around 2.6 million sales and counting.
Here, we explain a bit about the scheme’s history, who’s eligible, how to apply, and what sort of discount is on offer.
Note that Scotland and Wales no longer offer Right to Buy schemes. These closed in 2016 and 2019, respectively.
What is the Right to Buy scheme?
The Right to Buy scheme was first introduced by then prime minister Margaret Thatcher in 1980, as part of the Housing Act.
The idea was to give council tenants the opportunity to get their foot on the property ladder by buying the house they were renting from the local authority.
But to take advantage of the scheme, you have to fit some strict eligibility criteria.
Am I eligible to buy my council house or flat?
You can apply to buy your council home if:
- Your council house is your only or main home
- Your property is self-contained (meaning you don’t share facilities, such as a kitchen and bathroom, with people outside your household)
- You’re a secure tenant (meaning you can live in the property for the rest of your life, as long as you don’t break the terms of the tenancy).
- You’ve had a public sector landlord (for example, a council, housing association, or an NHS trust) for a total of three years. This doesn’t have to be three years in a row – just three years in total
However, not everyone is eligible for the Right to Buy scheme. You won’t be able to buy your council house if:
- You live in sheltered housing
- Your home isn’t self-contained
- It’s not your only or main home
- The council has provided your house so you can be near your place of work
- Your home has been specially adapted for older people.
- The courts have made a possession order against you that says you must leave your home
- You are bankrupt or have an arrangement with creditors, and you owe them money
Can I buy an ex-council house?
If your home was once owned by the council but was sold on to another landlord while you were living there, you may still be able to apply to the Right to Buy scheme. This is known as a “Preserved Right to Buy”. You’ll still need to meet the eligibility criteria above.
You may also be eligible for the Preserved Right to Buy scheme if, after your house was sold to a new landlord, you moved into a different property that’s owned by the same landlord.
What about housing association tenants?
If you’re a housing association tenant (as opposed to a council tenant), you may be able to use a different scheme to buy your property, called “Right to Acquire.”
You have to meet both of the following criteria:
- Your home was built after 1997 and was funded by the government
- You’ve been a tenant of the housing association or council for more than three years
If you’re unsure about either of these, your housing association should be able to help.
How much can I buy my council house for?
When you apply for Right to Buy, your local council will value your property and let you know the discount they’re willing to offer you.
- You can get a rough idea of the value of your home by searching for similar properties in your area on Zoopla or Rightmove.
You can see Right to Acquire discounts by location here.
What are the discounts available on the Right to Buy scheme?
If you’re eligible for Right to Buy, the maximum discount you can get is 70% of the market value of your home or £84,600 (whichever is lower). This goes up to £112,800 if you live in a London borough.
The discount is based on:
- How long you’ve been a public sector tenant
- The type of property you’re buying (a house or flat)
- The value of your home
Here’s how it works in a little more detail:
- If you’ve been a public sector tenant for 3–5 years (and you live in a house), you’ll get a 35% discount off the market value of your property, up to a maximum of £84,600 (or £112,800 for London).
- If you’ve been a public sector tenant for more than 5 years (and you live in a house), you’ll get an extra 1% discount for every additional year up to a maximum of 70% or £84,600 (£112,800 for London) – whichever one is lower.
- If you’ve been a public sector tenant for 3–5 years (and you live in a flat), you’ll get a 50% discount off the market value of your property, up to a maximum of £84,600 (or £112,800 for London).
- If you’ve been a public sector tenant for more than 5 years (and you live in a flat), you’ll get an extra 2% discount for every additional year up to a maximum of 70% or £84,600 (£112,800 for London) – whichever one is lower.
If you sell your home within five years of buying it, you’ll usually have to repay some or all of your discount.
Do I need a deposit when purchasing a council home?
Many high street lenders ask you to have a minimum of between 5% and 10% of the property price saved as a deposit before they’ll offer you a mortgage.
However, some specialist lenders will let you use your Right to Buy discount as a deposit instead.
Just remember that, even if you can use your discount as a deposit, you’ll still need some money saved to pay any mortgage fees and legal costs when buying your council house.
Read more: What’s the full cost of buying a house?
How do I apply for Right to Buy?
If you’re eligible for the Right to Buy scheme and you’d like to apply to buy your council home, you’ll need to fill in an RTB1 application form.
Once you’ve done that, you can save it, print it, sign it, and mail it to your landlord. It’s a good idea to send the form via recorded delivery, so you know they’ve received it. Your landlord needs to respond within 4 weeks of your application (or 8 weeks if they’ve been your landlord for under three years).
If they’re willing to sell you the property, they’ll send you an offer.
What does the offer include?
Your landlord’s offer will outline:
- The price of the property (and how they calculated it)
- Your discount (and how they calculated it)
- A full description of the property and any land included in the sale
- Service charge estimate for the first five years
- Any structural problems with the property that you need to be aware of
If you want to press ahead with the purchase, you’ll need to let your landlord know within 12 weeks of their offer.
Being sent an offer doesn’t mean you’re obliged to accept. You can withdraw your application and continue renting at any time.
What if I disagree with their offer?
It’s possible you may not agree with your landlord’s offer. In this case, you should get in touch with them and let them know why.
If you think the property’s market value is too high, you can ask for an independent valuation. A district valuer from HMRC will visit the property to determine its value. You’ll have 12 weeks to agree with that valuation or withdraw from the sale.
What if my landlord declines my application?
If your landlord is unwilling to sell you the property, they have to tell you why.
You may be able to appeal their decision, but only if their reason for declining your application is that the property is suitable for older people. You must appeal to a housing tribunal within 56 days of your application being turned down.
Can Habito help me find a Right to Buy mortgage?
Yes, we can! As a whole-of-market broker, we have access to 90+ lenders and over 20,000 deals. That means we can help you find the best deal for your situation, including those specialist lenders who’ll consider your Right to Buy discount as a deposit.
Simply answer a few quick questions to get started.