Right to Buy
By Marie Kemplay
Right to Buy
Learn about who's eligible for Right to Buy, how it works and how much money you could save.
The extension of Right to Buy has been big news, but what does it really mean for you if you're a council or housing association tenant?
What is Right to Buy?
Originally introduced in 1980, Right to Buy gives council tenants the opportunity to buy their homes at a discount.
The government plans to extend Right to Buy to allow housing association tenants to use the scheme, although this won't be rolled out across the country until April 2018 at the earliest.
Under the current system, the maximum discount you can get is 70% off the purchase price of your home, up to a total of £103,900 in London and £77,900 elsewhere in England.
- If you want to purchase your home through Right to Buy, you'll need to find a suitable mortgage. For impartial advice based on your personal circumstances, contact Which? Mortgage Advisers on 0808 252 7987.
Right to Buy housing association properties
As part of the 2016 Autumn Statement, Chancellor Philip Hammond announced a regional pilot of Right to Buy which will allow up to 3,000 housing association tenants to buy their homes.
This pilot is expected to last for up to five years, but we don't yet have details on when it'll be launched or who will be eligible.
The full national roll-out of Right to Buy for housing association tenants has now been delayed until April 2018 at the earliest.
- Get more information on the progress of the Right to Buy extension by signing up for the government's housing association register
Low levels of uptake for initial pilot scheme
Following the 2015 Autumn Statement, the government launched an initial pilot of Right to Buy allowing long-term tenants of five housing associations - L&Q, Riverside, Saffron Housing, Sovereign and Thames Valley Housing - the opportunity to purchase their homes.
As of August 2016, just 790 of 48,000 qualifying tenants had applied to use the scheme, according to data from the National Housing Federation.
Right to acquire
As it stands, most housing association tenants can only buy their homes at a discount if they have a 'Preserved Right to Buy' or a 'Right to Acquire'.
The Preserved Right to Buy is for people who were previously living in a council property that was then transferred to another landlord, such as a housing association.
The Right to Acquire gives housing association tenants a discount of between £9,000 and £16,000 when buying their homes, depending on their circumstances and where they live in the UK. You can find out whether you're eligible on the government advice page on Right to Acquire.
Am I eligible for Right to Buy?
Under the current rules, if you have spent at least three years living in a council house or flat, you can use Right to Buy. If you've moved around a lot, don't worry, as the three-year period doesn't have to be continuous – although you do need to have lived in your current home for at least 12 months.
Joint applications are allowed, so you have the option of buying your home with a fellow tenant or partner. You can also apply with up to three family members, providing they have also lived in the property for the past 12 months.
The Right to Buy scheme only applies to tenants in England, and the government has set up an online questionnaire to help you find out if you're eligible.
While the vast majority of council houses can be purchased through Right to Buy, there are some restrictions, so check your property is eligible before applying.
How much money will I save if I use Right to Buy?
Your Right to Buy discount depends on the type of property you are buying and how long you have been a council tenant.
If you live in a house and have been a council tenant for at least three years, you can benefit from a 35% Right to Buy discount. After five years, this discount increases by 1% each year, up to a maximum discount of 70% off the purchase price.
Buyers who live in a flat get an initial discount of 50% after three years, which increases by 2% each year after five years. As with houses, the maximum discount for people buying their council flat is 70% off the purchase price.
If you sell your home within the first five years of your purchase, you will have to pay back some or all of the discount.
Find out more: before taking the plunge, make sure you understand all of the costs of buying a house
How do I buy my home using Right to Buy?
First, you'll need to complete an online application form. Your landlord will then have up to four weeks to confirm whether you have the Right to Buy (or eight weeks if you've been with your current landlord for less than three years).
Your landlord will then send you an offer within eight weeks (or 12 weeks for a leasehold property). This document will cover the purchase price, the discount and details of any structural problems.
Once you're happy with the terms and have arranged the finances, you can complete your purchase.
Having a relatively small deposit isn't necessarily a deal-breaker, as many lenders will accept the discount you receive on your home as a deposit. Not all lenders will allow this, however, so make sure you do your research.
There are mortgages out there for buyers with small deposits. For a free consultation about the best mortgage for you, contact Which? Mortgage Advisers on 0808 252 7987.
Are there any alternatives to Right to Buy?
If you can't afford to buy your home using Right to Buy, you could instead take advantage of other schemes such as Social HomeBuy.
Social HomeBuy allows you to purchase a share of your council or housing association property and pay rent on the rest of it.
This differs from Right to Buy because, if you use Social HomeBuy, you could receive a discount of £9,000-£16,000. You can find out more with the government guide to Social HomeBuy.
- Last updated: November 2016
- Updated by: Stephen Maunder