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Right to Buy Scheme: Everything You Need to Know

Zenyx Griffiths

Written by

19th Feb 2020 (Last updated on 18th Aug 2021) 5 minute read

Right to Buy is a government-run scheme that allows most council tenants to buy their council home at a discount of up to £112,800 in London Boroughs, and £84,600 across the rest of England. It has been discontinued in both Scotland and Wales.

The scheme was first introduced in 1980 as a way of helping council tenants get on the property ladder by owning their first home. Of course, not everyone will be eligible and the percentage of discount relies heavily on a number of factors.

This complete guide presented by Compare My Move gives all you need to know about Right to Buy, including who is eligible, the amount of discount and how to apply.

This article will cover the following:
  1. Who has the Right to Buy?
  2. How Much Discount Can You Get with Right to Buy?
  3. How to Apply for Right to Buy
  4. Can You Sell Your Right to Buy Property?
  5. Right to Buy in Wales, Scotland and Northern Ireland
  6. Next Steps of Buying a House

Who has the Right to Buy?

The Right to Buy Scheme is available for secure tenants that inhabit any public sector housing (council, housing association and NHS). You will only be eligible to apply to purchase your council house if:

  • it's your main residence
  • it's self-contained (i.e. not a bedsit)
  • you're a secure tenant
  • you’ve had a public sector landlord for 3 years (this does not have to be 3 years in a row)

You cannot apply for the Right to Buy scheme if you have a current court possession order that states you must leave your home.

You will also not be accepted for the scheme if you are an undischarged bankrupt, or have a bankruptcy petition pending against you. Equally, you cannot apply if you have a current arrangement with creditors of which you still owe money to.

Right to buy allows tenants to make joint applications if desired, whether with a spouse who has lived with you for the past 12 months, or another tenant.

Any land and outbuildings that have been let out to you during your tenancy should be included in the house sale.

Although right to buy is primarily for current council tenants, you may be eligible if your house was sold by your local council to your current landlord during your tenancy.

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How Much Discount Can You Get with Right to Buy?

The amount of discount you will receive with the scheme depends largely on the amount of time you have lived in your home, the property's value and also the type of property.

If you live in a house, you can get a 35% discount on the property value after just 3-5 years. This percentage will rise by 1% annually after 5 years.

For example, if you lived in a council house worth £150,000 for 10 years, you would be offered a discount of 40%. You would get a discount of £60,000, meaning you would only be expected to pay £90,000 for your property.

However, you will be offered a 50% discount for between 3-5 years if you live in a council flat. This percentage rises by 2% for every year you have lived in the flat.

For example, living in a council flat worth £100,000 for 10 years would qualify you for a discount of 60%. This means you would be expected to only pay £40,000, saving a massive £60,000.

All discounts are capped at 70% (40 years for a house and 15 years for a flat), as well as a price cap of £103,900 if you live in London and £77,900 if you live outside of London.

How to Apply for Right to Buy

Once you are eligible for the scheme and you are happy to proceed, you will need to fill out an RTB1 form. This is a request to your landlord or association that you want to buy your house under the Right to Buy scheme.

The form will need to include the full address of your property, name of your landlord, names and signatures of all tenants, as well as a list of any improvements you've made while living at the address.

Once you have sent the RTB1 form (it is suggested to have your paperwork sent via recorded delivery), your landlord will have up to 4 weeks to reply with a yes or no answer. If your landlord denies the application, they will have to give reason as to why, which can be contested.

If your landlord accepts your application, they must then send an offer within 8 weeks for a freehold property, and 12 weeks for if you're purchasing a leasehold house. Find out more about the difference between freehold and leasehold for further research. This offer will include the property price (before discount), the discount percentage, any service charges and any issues that were found or come with the property.

After receiving the offer, you will then have 12 weeks to choose whether or not you wish to proceed with the buying process.

As the buyer, you have the ability to back out of the sale at any time and continue choosing to rent your property.

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Can You Sell Your Right to Buy Property?

You can sell your property at any time, buy repayment periods will apply. If you decide to sell within a year of buying your home under the scheme, you will be expected to repay the entire discount to the council.

Selling your property within 1-2 years of purchasing, you would be expected to repay four fifths of the discount to the council.

After 5 years of owning your property, you would not have to repay any discounts if you chose to sell.

You are legally required to offer your property to the previous landlord or housing association if you choose to sell your property within 10 years of buying. However, you can sell your home to anyone if your landlord does not agree to purchase within 8 weeks.

Right to Buy in Wales, Scotland and Northern Ireland

While the whole of the UK has seen a version of Right to Buy in some form of another, there are some key differences in Wales, Scotland and Northern Ireland. Some have even been completely discontinued.

The Right to Buy and other associated rights ended in Wales in January 2019. However, Rent to Own, Shared Ownership and Help to Buy are still options for buyers.

Right to Buy has been discontinued in Scotland as of August 1, 2016. Scottish council tenants who wish to apply for a discount had to apply for Right to Buy before July 31, 2016.

Whilst other areas of the UK have ended Right to Buy, Northern Ireland and England still offer it but there are some differences to consider. Northern Ireland offer a maximum discount of 60% or £24,000 (whichever is less) and you will need to have lived in your property for a minimum of 5 years before applying.

Next Steps of Buying a House

This has been part of our buying guide. In our next article, we will look at building regulations. To learn more, read buying a house without building regulations approval.

Zenyx Griffiths

Before Compare My Move, Zenyx once wrote lifestyle and entertainment articles for the online magazine, Society19 as well as news articles for Ffotogallery.