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Understanding the Right to Buy Scheme

Understanding the Right to Buy Scheme

The Right to Buy scheme is a policy in the United Kingdom designed to allow most council tenants and some housing association tenants to buy their current home at a discounted price. This initiative has been a significant part of UK housing policy for several decades.


What is the Right to Buy Scheme?

The Right to Buy Scheme was introduced in the 1980s with the aim of enabling eligible public sector tenants to purchase their homes at prices lower than the market value. The scheme was developed as an effort to encourage home ownership and to give individuals who might not have otherwise had the opportunity, the chance to own their property.


blossom tree in front of house

Eligibility Criteria

  • You must be a tenant in a council or public sector property.

  • You need to have been a public sector tenant for at least three years (although this does not have to be continuous).

  • The property must be your only or main home.

Certain properties are exempt from the Right to Buy scheme, including homes suitable for elderly people, temporary housing, and homes due for demolition.


Discounts Under the Right to Buy

Discounts under the Right to Buy scheme vary depending on the type of property and the length of tenancy. Generally, the longer you have been a tenant, the greater the discount you can receive, up to a maximum limit set by the government.


Types of Properties and Associated Discount

  • Houses: If you have been a public sector tenant for between three and five years, you may be eligible for a 35% discount. After five years, the discount increases by 1% for every extra year of tenancy, up to a maximum of 70%.

  • Flats: Initial discounts start at 50% for tenants of three to five years and increase by 2% for every additional year, up to the government's defined maximum.


The total amount of discount is capped and can vary between regions within the UK.


How to Apply

  1. Request an application form (RTB1) from your landlord.

  2. Complete and return the form to your landlord.

  3. Your landlord is obligated to respond to your application within a specified time frame, stating whether you have the Right to Buy.

  4. If you qualify, your landlord will send you an offer.


In the event that your landlord presents you with an offer, it is advisable you seek advice from a professional if needed. This offer can be checked and explained to you to avoid any uncertainties.


Considerations Before Purchasing

Before proceeding with the purchase, you might want to consider the following:


  • Affordability: Ensure that you can afford the mortgage and other costs associated with homeownership.

  • Condition of Property: Investigate any necessary repairs or maintenance the property may require. You have had the advantage of living there for a period of time, it is advisable to take into consideration the quality of the property.

  • Future Plans: Reflect on whether you plan to stay in the area long-term, as due to the conditions of the Right to Buy Scheme, selling your property within five years of purchasing it would mean repaying some or all of the discount. Taking a long-term view could be beneficial.

  • Advice: Seeking the right advice to understand all implications and obligations of purchasing your home under this scheme. Having a professional available to guide you through this process can help ease the transition into home owning.


Conclusion

The Right to Buy scheme has transformed the lives of many families in the UK, offering a pathway to home ownership that was not previously available.


However, it is important to fully understand the eligibility requirements, benefits, and long-term implications before making such a significant commitment. As with any major financial decision, it is wise to consult with a professional advisor to guide you through the process.


If you are considering whether the Right to Buy scheme could be an option for you, get in touch with us today to review your options.


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


Approved by The Openwork Partnership on 04.04.2024


Providence Global Finance is a trading name of Just Mortgages Direct Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority.​

 

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