For many people struggling to buy their home, the first thing they turn to help them is the government’s Help to Buy scheme. However, Help to Buy isn’t the only government scheme that can help you to buy a home. The Right to Buy scheme was introduced in 1980 and is designed to allow most council tenants in England to buy their council home at a discount. Major changes were made to the scheme in April 2012, dramatically increasing the amount of discount that tenants can get.
How much discount?
How much discount you will get depends on a number of factors, including the value of your home, the type of property you are intending to buy (for example whether it is a flat or a house), and how long you have been a tenant with a public sector landlord.
If you are buying a house, you get a 35% discount if you have been a public sector tenant for five years, which increases by 1% for every year extra to that you have been a public sector tenant. So, if you have been a public sector tenant for 20 years, you would get a 50% discount. The maximum discount on a house is currently 60%.
If you are buying a flat, you get a 50% discount if you have been a public sector tenant for five years, and this increases by 2% for every extra year. The maximum discount here is 70%.
If you are buying the property with someone else, then you take the number of years of the person who has been a public sector tenant for the longest amount of time. The maximum discount you can get on a house or flat across England is £75,000, except in London where it is £100,000.
If your landlord has spent money building or maintaining your home in recent years then your discount will be less. If you go on to sell your home within five years, you should note that you may have to repay some or even all of your discount and if you have used Right to Buy in the past, you may get a smaller discount this time round.
The Community and Local Government Secretary, Eric Pickles, announced on the 3rd January 2014 plans for the maximum discount for a house to increase from 60 to 70% of its value, and for the £75,000 cap to start to increase each year in line with inflation.
You can only apply to buy your council home if it is your main or only home, if it is self contained, if you’re a secure tenant, and if you’ve had a public sector landlord for five years. A public sector landlord can be a council, a housing association or NHS trust for example. It is important to note that it does not have to be five consecutive years – it could be one period of two years and another period of three years for example.
You are allowed to make a joint application to buy your council home with someone who shares your tenancy, or up to three family members who have lived with you for the previous 12 months. The three family members do not have to share your tenancy.
Preserved Right to Buy
If the council used to own your home, but then sold it to another landlord (e.g. a housing association) while you were still living in it, you may still have the Right to Buy. You will need to ask your landlord if this applies to you. This is called the Preserved Right to Buy.
For more information about conveyancing, including buying and selling property and the right to buy scheme, click here to visit our residential property services page.