Right to Buy Scheme

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Right to Buy Scheme

On this episode of the Mortgage and Protection Podcast we’re talking about the Right to Buy scheme with Leanne from CD Financial.

On this episode of the Mortgage and Protection Podcast we’re talking about the Right to Buy scheme with Leanne from CD Financial.

What is the Right to Buy scheme and how does it work?

The Right to Buy scheme allows most council house tenants to buy their property at a discounted rate. The discount offered varies depending on location and the length of time as a tenant. It may mean that you can buy without a deposit. 

Who qualifies for the Right to Buy scheme?

To qualify, you’ll need to have been a council tenant for a minimum of three years and the property that you’re living in must be your only residence. You must also be named on the tenancy agreement. 

You may also qualify for the Right to Buy scheme if your home was previously owned by the council but was sold to another landlord, such as a housing association, whilst you were living in it. This is known as Preserved Right to Buy. Also, you must not have any debt problems such as undischarged bankruptcy or have a bankruptcy petition against you. You also must not have any debt relief orders.

What is the process if I do qualify for Right to Buy?

The first step is to complete a Right to Buy application form. You can obtain this document online or via your local housing office. Once you’ve returned your application, it will be processed typically within four weeks and you will be told whether or not you have the right to buy your property. 

The council then typically has eight weeks to value your property and confirm the purchase price and discount to you. Once you know these details you will be able to seek a mortgage and have a look into your options – which is where we would come in to assist you.

How much is the discount?

The longer you’ve lived in the property, the bigger the potential discount off the market value of your home. The maximum discount is £84,600. However, if you’re based in London the maximum is £112,800.

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Can I let my Right to Buy property?

I don’t believe it is possible, but it is always worth checking with your local council as each one will have slightly different rules.

Can the council refuse my Right to Buy application?

In short, yes, they can decline your application. You have the right to challenge the decision and ask them to review your application. If you’re granted a review, someone more senior within the council will take a look at your application. It’s definitely worth asking questions if you are declined.

What does Right to Acquire mean?

The Right to Acquire scheme is very similar to Right to Buy. It allows housing association tenants to buy their home at a discounted price. You can apply to buy your home if you’ve had a public sector landlord for a minimum of three years – this would be housing associations, armed forces or NHS foundation trusts. 

You may receive a discount between £9,000 and £16,000 but again this depends on the region that you’re living in and how much your property is worth.

What happens if there are delays with the application processes?

Your landlord or council must complete parts of your Right to Buy application within set time limits. If they miss these deadlines, there may be a reduction in the property sale price. This helps make sure that things go as smoothly and quickly as possible.

What advice would you give to someone interested in Right to Buy?

Although you get quite a large discount, and in some cases you don’t have to put down any deposit, it’s really worth thinking about having some savings put aside for additional costs. 

For example, you’re going to have fees for surveys and legal services. Plus, depending on the type of property you’re buying there could be service charges and potentially repairs or household improvements. So it helps to have some savings set aside as a safety net.

Also, do seek mortgage advice. That’s what we’re here for. We’re here to help people and make things easier. Buying a house isn’t something that people do every day and not many people are very familiar with the Right to Buy scheme.

So it’s always worth talking to an advisor and we can guide you through the process.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE