Right to Buy

What is Right to Buy?

Right to Buy is a government scheme aimed at helping council tenants to buy the home they currently live in, at a significant discount.

How does Right to Buy work?

The majority of council tenants have a secure tenancy, meaning they are under no time limit in terms of the duration of their tenancy. Most people in this position will be able to buy their home under the Right to Buy scheme if they want to and can afford to.

With Right to Buy, it may be possible to buy your home with a discount of up to £82,800 (or £110,500 in London) if you’re currently living in a council property.

Am I eligible for Right to Buy?

You could be eligible for Right to Buy if you currently live in a self-contained council home, which is your only or main home, and you’re a secure tenant. You’ll also need to have had a public sector landlord (such as the council, or a housing association) for at least three years, but these don’t have to be consecutive.

You may also be eligible under ‘Preserved Right to Buy’ if your current home used to be owned by the council, but was sold on to a housing association or other landlord, while you were living in it.

There is a Voluntary Right to Buy pilot running in some parts of England, which you may be able to sign up for if you live in a former council house but you weren’t living there when it was sold.

Right to Acquire

What is Right to Acquire?

Right to Acquire is a similar scheme aimed at those renting homes from housing associations, but the discount involved will be smaller.

If you’re either a council or housing association tenant, you may well have the right to buy the home you live in, at a reasonable cost.

But there are a few differences between Right to Buy and Right to Acquire that you need to be aware of.

How does Right to Acquire work?

Housing association tenants can often buy their home under the Right to Acquire scheme, which is similar to the Right to Buy scheme but involves a smaller discount. The discounts available under this scheme will depend on where you live. You could be offered between £9,000 and £16,000 if you’re eligible.

Am I eligible for Right to Acquire?

You could be eligible for Right to Acquire if you currently live in a self-contained housing association home, which is your only or main home.

Your property must also have been either:

  • A former council home transferred to a housing association after 31st March 1997 

Or 

  • Built or bought by a housing association after 31st March 1997 (funded through a social housing grant)

There are eligibility checkers available on government websites, such as this one. If you want to go ahead, you’ll have to fill in a Right to Buy or Right to Acquire application form, and if your landlord is in agreement, they’ll respond with a price for your home, details of your discount, and a description of what’s included in the price. (1)

How to apply for a Right to Buy or Right to Acquire mortgage

If you decide to buy under Right to Buy or Right to Acquire, you’re responsible for how you finance your home. You’ll need to apply for a mortgage the same way any home buyer would.

Let your lender or mortgage broker know that you’ll be buying through a government scheme, and which one it is, when you give them all your other details. This will help them offer you suitable mortgage deals. (2)

Right to Buy and Shared Ownership

It’s not currently possible to use the Right to Buy scheme if you already part own your home. You should discuss your options with your housing association if you want to buy a bigger share in your Shared Ownership home.

When will housing association Right to Buy start?

It already has. That’s what the voluntary pilot scheme mentioned above is. But right now, it’s only available if you live in the East and West Midlands area. The pilot scheme finishes in 2020 and will then be evaluated, and the results will determine if it becomes widely available.

If the scheme goes well, it’s possible that it will be extended to other areas, though it’s also possible that it will be rolled out slowly across the country.

Can I rent out my Right to Buy home?

It’s often possible to rent out your property once you’ve completed your purchase, but always check with the council or housing association you bought from.

There may be a one off sublet fee, and the council will also want to have an alternative address for you.

Can I get Right to Buy or Right to Acquire in Scotland?

These schemes are only available in England. Different rules apply in Scotland, and also in Wales and Northern Ireland.

Do you pay stamp duty on Right to Buy properties?

Stamp duty applies as normal, but as there is stamp duty relief for first time buyers on properties up to £300,000, many Right to Buy and Right to Acquire properties will be exempt.

Is Right to Buy ending in England?

The government hasn’t announced any plans to end Right to Buy in England any time soon. In fact, it’s stated that it has plans to extend the scheme to more housing association tenants, which is why it started a voluntary pilot scheme to allow more people to use the Right to Buy scheme.

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Your home could be repossessed if you don't keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.

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Sources

The information on this page was sourced from Gov.uk unless otherwise stated below.