Yes, you can buy your council house – and how you pay for your property is up to you.
You can either buy your council house by taking out a mortgage or, if you have the money available, in cash. We’ll go into these options in a little more detail shortly.
But first, you have to qualify for the Government’s Right to Buy scheme. Let’s take a closer look.
What is the Right to Buy scheme and how does it work?
The Right to Buy scheme allows you, as a council tenant, to buy your council house at a discount. That means you’ll get a certain amount of money deducted from the cost of your house, which you might even be able to use as a deposit.
You need to be eligible for this scheme, more on that next.
Am I eligible?
The easiest way to check whether you’re eligible for Right to Buy is to fill in this quick quiz. These questions make sure that:
- Your council house is your only or your main home
- It’s self-contained (this means that you don’t share any rooms or facilities with other tenants in your building)
- You’ve had a public sector landlord (such as a council, housing association or a government department) for three years (not necessarily in a row)
The eligibility rules are slightly different for Wales, Scotland and Northern Ireland. Make sure you’re aware of the rules for your country.
What are the costs involved?
There are different costs involved depending on whether you take out a mortgage or if you choose to pay for your house in cash.
You might think that you won’t have to pay any fees if you pay for your house in cash, but, unfortunately, this isn’t the case. You’ll still have to pay your solicitor’s fees, VAT, the Land Registry fee and the telegraphic transfer fee. It’s also a good idea to get a survey done and to do drainage and local searches, which you’ll have to cover, too.
If you take out a mortgage, there are some additional costs to factor in, like the arrangement, booking, valuation, legal and bank transfer fees, as well as a few others.
Try not to let these costs deter you from buying your own home. They’re an inevitable part of the process, and if you’re properly prepared for them, they won’t come as a surprise.
Are there discounts?
Yes! That’s one of the best advantages of the Right to Buy scheme. The discount you’ll receive depends on a few key points:
- How long you’ve had a public sector landlord
- The type of property you’re buying (whether it’s a flat or a house)
- How much your property is worth
If you’ve lived in your property for three to five years, you’ll receive a 35% discount for a house and a 50% discount for a flat.
If you’ve lived in your property for over six years, you can add 1% a year for houses (up to 70% or the maximum, whichever is lower), and 2% a year for flats (up to 70% or the maximum, whichever is lower).
The maximum amount depends on whether your council house is in London or another part of England. If you live in London, the biggest discount you can receive (as of April 2021) is £112,800, while, elsewhere in England, this maximum is capped at £84,600. These figures increase in April every year in line with inflation.
Some lenders will allow you to use your discount as a deposit, but not all of them. It’s always worth asking, though.
If you’re curious about what kind of discount you can expect, punch your details into this Right to Buy calculator.
Can my children buy my council house for me?
Yes, they can, but, once again, it depends on some important criteria. Your children or other family members will only be eligible to join your Right to Buy application if:
- They’re listed as a tenant on the agreement you have with your landlord, or
- They’ve lived on your property for the past 12 months
The law doesn’t say anything about how the Right to Buy purchase should be financed, and the money could certainly come from someone other than yourself. But that person needs to fall into one of the two categories above.
The same rules apply if you want to buy your parents’ council house for them.
The joint ownership process can be a bit tricky, and it’s probably a good idea to get some financial and legal advice on these sorts of applications. Habito can help.
Can I get a mortgage to buy my Right to Buy property?
Yes, you certainly can. In fact, most people don’t buy their homes with cash, but apply for a mortgage instead. Remember that how you decide to finance your purchase is up to you. Your landlord can’t persuade you to choose a specific kind of mortgage or use a certain lender.
The following articles will help answer some of your most important questions about getting a mortgage:
Can I buy my council house while on benefits?
Absolutely. Being on benefits doesn’t affect your legal ability to use the Right to Buy scheme, but you’ll need to be able to make your monthly repayments without using your benefits.
It’s also important to remember that being a homeowner might affect your benefits. You won’t be eligible for a housing benefit if you own your home, for instance.
Do I need a solicitor when buying a property in cash?
Not legally, but it’s certainly recommended. A solicitor provides several essential services that you’ll need a hand with, even if you’re paying for your property in cash.
A solicitor serves as an intermediary between you and your landlord’s solicitor, obtains and fills out all the necessary paperwork, manages any searches you may choose to do, and handles all the fee payments. Having an expert to help you manage the legal and technical fine print can put your mind at ease that everything is progressing as it should.
It might feel like there are a lot of criteria to meet to buy your council house. But if you check all the boxes, you could have a home of your own at a discounted rate. And you won’t even need to pay any removal fees!
Still have some questions? Let us help.