Right to Buy under review
Right to Buy consultation
Deputy Prime Minister Angela Rayner has confirmed that the Government plans to review the current Right to Buy scheme in England. A consultation on the scheme is due to be brought forward in the autumn. As we wait to see what changes will be made to the scheme our Head of Property Mark Laird answers frequently asked questions on the scheme.
What is the Right to Buy?
Introduced by Margaret Thatcher’s government in 1980, the Right to Buy scheme allows council tenants to buy the home from the local authority at a heavily discounted price. Government statistics confirm that since the introduction of the scheme over two million homes have been sold to council tenants exercising their Right to Buy.
Who is eligible?
You can apply to purchase your council home if you have rented from public sector landlords for at least three years. Public sector landlords include local authorities, an NHS trust and housing associations.
You may purchase the property in your sole name or with up to three family members who have lived with you for the past twelve months.
How big is the discount?
The discount applied to your purchase will vary depending on the type of property and how long you have been a tenant with a public sector landlord.
If you are buying a house the discount will start at 35% of the value of the property for tenants who have rented for between three and five years. After five years the discount is increased by 1% for every year you have been a tenant of a public sector landlord up to a maximum of 70%.
If you are buying a flat the discount starts at 50% of the value of the property for tenants who have rented for between three and five years. After five years the discount is increased by 2% for every year you have been a tenant of a public sector landlord up to a maximum of 70%.
The maximum discount is capped across most of England at £102,400.00. In London boroughs this is increased to £136,400.00.
What if I sell my home?
You will have to repay at least some of the discount if you sell your home within five years of purchasing under the Right to Buy Scheme. The amount repayable will depend upon how long you have owned your home. The full discount will be repayable if you sell within 12 months of your purchase. This reduces by 20% every year until you have owned the property for five years.
The local authority will also have the right of first refusal when you come to sell the property for the ten years from the date of your purchase. This means you will not be able to sell your property without first offering the local authority the opportunity to buy the property back from you.
What is Right to Acquire?
The Right to Acquire is a scheme under which housing association tenants can purchase their home for similar discounts.
Why is the Right to Buy under scrutiny?
Government statistics show that only one third of council homes sold under the scheme since 2012 have been replaced. This has drastically reduced the amount of social housing available to low income and vulnerable families. It is also believed that over 40% of homes purchased under the scheme are now owned by let by private sector landlords.
What will change?
It is not yet known what, if any, changes will be made to the scheme. However, the Deputy Prime Minister has confirmed that the eligibility criteria and the amount of discount available are both factors which will be reviewed.
For more information on our residential property and conveyancing services, call us on 033 3344 9607 or email [email protected].
Author: Mark Laird, property.
