The Right to Buy scheme offers council tenants in the UK a unique opportunity to purchase their rented home at a discount.
However, navigating the eligibility criteria and understanding the legal considerations is essential before embarking on this process.
Erin Cronin, our Residential Property Department Director, sheds some light on when council tenants can exercise their Right to Buy and the key factors they need to consider before applying.
Am I eligible?
Provided they have lived in a council-owned property for a certain period of time, most council tenants will become eligible for the scheme.
Tenants can apply to buy their home if:
- They have had a public sector landlord for three years or more (not necessarily consecutively)
- The home is self-contained
- The property is their only or main home
- They have a secure tenancy
It’s important to note that the length of tenancy can significantly affect the discount for which buyers are eligible, encouraging long-term tenants in particular to consider the scheme.
What do I need to consider before applying?
Tenancy status
Applicants must have the right tenancy status to be eligible.
Secure is typically given after 12 months, provided that the landlord has not sought to evict the tenant and there has been no breach of contract.
A secure tenancy generally means that tenants have the legal right to occupy the home indefinitely, sub-let parts of it, make certain repairs and swap homes with other applicable tenants.
Know your financial position
It is crucial for applicants to conduct a thorough financial assessment.
Purchasing a home is a significant investment, so potential buyers should consider mortgage availability, the impact of future interest rate rises, and their ability to maintain mortgage payments.
Additionally, understanding the full spectrum of costs involved in buying a home, including legal fees, stamp duty (if applicable), and ongoing maintenance costs, is critical.
Leasehold or freehold?
Buyers should also determine whether the property is leasehold or freehold.
Most houses are sold freehold, while flats are usually sold leasehold.
If purchasing a leasehold property, tenants should be aware of any service charges and ground rent, as well as the lease length, as these factors can affect the property’s future saleability and value.
Future sale restrictions
Be mindful of potential restrictions on selling the property.
The Right to Buy scheme includes a clause requiring buyers to repay some or all the discount if they sell the property within five years.
Furthermore, if the tenant sells the house in the first 10 years, they must first offer it back to the former landlord or another social landlord in their area at the market rate.
Applying for Right to Buy
After navigating these considerations and decided to proceed, the next step for tenants is to complete the Right to Buy application form (RTB1) and submit it to the landlord.
They must respond within four weeks (or eight weeks if they’ve been your landlord for less than three years), acknowledging the tenant’s right to buy and outlining the terms.
Applicants will then have 12 weeks to decide whether to accept the landlord’s offer or inform them that they disagree with it.
Need help? Given the complexity of the process, we understand the need for tailored advice and practical support.
To speak to a member of our residential property team, please contact us today.
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