For many, buying their council house is a great way to get their foot on the property ladder. It is an investment for the future. It can also provide the freedom to make changes to the home and make it your own.
However, you must not only meet the criteria to be eligible to buy your council house, but you should also be sure you can afford it. This includes mortgage fees and solicitor’s fees, in addition to monthly mortgage instalments.
The government scheme Right to Buy was introduced to help those wanting to buy their council house. It offers a discount for those buying their council house. Be aware that this is now only available in England.
Below we look at the process of buying a council home. This includes eligibility, cost and how to apply for the Right to Buy scheme.
Are You Eligible to Buy a Council House?
Those who are eligible to buy a council house include:
Council tenants
Tenants of a housing association
Current or former armed forces members
Eligibility Requirements
To buy your council home, you must meet the following requirements:
It must be your only/main home
You must hold a secure tenancy
The house must be self-contained (you don’t share any rooms with anyone outside the household)
You have had a public sector landlord for at least 3 years
You must not have had legal issues with debt
You must not have any outstanding possession orders
What is the Right to Buy Scheme?
The Right to Buy Scheme is open to eligible council and housing association tenants. Ultimately, it means getting a discount on the value of the council home when you buy it if you qualify. Right to Buy was first introduced in 1980 but had major changes in 2012 under the Coalition Government.
The scheme ended in Scotland in July 2016 and in January 2019 in Wales. It is also no longer available in Northern Ireland.
If you're a council tenant in England the Right to Buy scheme could help you buy the home you rent with a discount of up to £102,400 (£136,400 in London).
Be aware that you will usually have to repay some or all of your discount if you sell the home within 5 years.
The following homes do not qualify for the scheme:
Some sheltered housing or adapted properties
Homes due to be demolished in 2 years
Homes that aren’t self-contained (shared living spaces with other households)
Some homes that are provided as part of your job
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Different Discount Levels for Right to Buy
There are different discount levels for houses and flats. Tenants of council houses are granted a 35% discount if they’ve been a public sector tenant for between 3 to 5 years. After 5 years, the discount increases by 1% for every year.
For flats, the discount is 50% if you’ve been a public sector tenant for between 3 to 5 years. After 5 years, the discount increases by 2% every year you remain a tenant.
Discounts for both houses and flats reach up to 70% or £102,400 (£136,400 in London), whichever is lower.
If the landlord has spent money on the home (improving and maintaining it), the discount will be less. The Housing Act 1985 limits the Right to Buy discount to ensure that the property’s purchase price does not fall below what has been spent on it. If the landlord has spent more money than the home is worth you will not get any discount through the scheme.
How Much Deposit Is Needed to Buy a Council House?
You will need a deposit of at least 5% of the purchase price. It is recommended that you put down 5%-10%. However, if you can pay a higher deposit, you are more likely to secure a mortgage with a lower interest rate.
Some lenders may let you use your Right to Buy discount as a deposit. It is recommended that you ask lenders if they accept this before continuing.
How Long Does it Take to Buy a Council House?
On average, it will take between 3 to 6 months for the entire house-buying process.
Buying a council house will likely take longer than a traditional house purchase. This is especially true if you buy through the Right to Buy scheme. This is because there are extra steps and paperwork involved in the process.
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Step-by-Step Process of Buying a Council House
Buying a council house differs from a traditional purchase as you must contact the council rather than submitting an offer to a buyer. Below we look at the process of buying a council house - from notifying the local council to becoming a homeowner:
Contact the Council
Contact the local council to express an interest in buying the property. They will provide you with an application where you must complete details about your eligibility and about the property.
Council Response
The council will assess your eligibility and contact you to arrange a viewing if required. They will return an offer for the property which you will need to accept.
Arrange a Mortgage
You will need a mortgage offer in place before proceeding. You can go directly to a lender or use a mortgage broker. If you want to use the Right to Buy discount as your deposit, you will need to check whether the lender accepts this. Brokers will be able to provide you with advice on applying for lenders that are open to Right to Buy deposits.
Instruct a Conveyancer
After receiving the offer from your landlord, you should instruct your conveyancer. This begins the conveyancing process.
Arrange a Survey
Your valuation will give you an idea of the condition of the property, but a property survey will provide you with far more information. It can highlight any issues, defects or developing problems in the property. Depending on the age and condition of the property, you should opt for a RICS Home Survey Level 2 or Level 3.
Confirm You Want to Proceed
Once you have accepted the offer from the landlord - and are happy with the price after a valuation and a survey - you should confirm you are happy to proceed. They will then prepare legal documents and send them to your conveyancer.
Your conveyancer will deal with the contract, and land registry and liaise with the landlord/council on your behalf. They will also arrange a completion date.
Completion Date
On this date, both the sale price and any outstanding rent must be paid to the landlord. You cannot complete the sale if rent is owed. The landlord will then end your rent account and you will be the legal owner of the property.
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Buying a Council House Through the Right to Buy Scheme
There are extra steps to buying your council house if you are buying it through the Right to Buy Scheme. Remember this is only available in England. You can find out if you’re eligible for Right to Buy using the Own Your Home quiz.
The additional elements when using Right to Buy include:
RTB1 Application Form
If you qualify for Right to Buy you will need to fill out the Right to Buy applications form known as the RTB1 on the government website. You can make a joint application with someone who shares your tenancy or a spouse or civil partner.
You can also apply with up to 3 family members who have lived with you for the past 12 months. They don’t have to be on the tenancy agreement but the property must be their main home.
Send to Your Landlord
Once the online form is completed, you will need to send it to your landlord (council/housing association).
Landlord Response
Your landlord must respond with either yes or no within 4 weeks of receiving your application. If they have been a landlord for less than 3 years they have 8 weeks to respond. If they do say no, they must give you their reasons why.
Landlord Offer
If they have agreed to sell, they will then send you an offer. If the property is freehold, they must send the offer within 8 weeks of agreeing to sell. If it is a leasehold property, the time is 12 weeks. You then have 12 weeks to respond to your landlord.
Right to Buy Valuation
In your landlord’s offer, they will include the home’s market value. By getting an independent RICS Valuation, you will know the market value of the home. This way you can be sure the landlord’s offer is fair and accurate. If it is not, you may be able to challenge it using your Valuation Report. This will be more accurate and effective than an estate agent’s valuation of the home.
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Finding a Conveyancer
When it comes to buying your council house, you will need to enlist the services of a professional conveyancer.
At Compare My Move, we can connect you with up to 6 conveyancers to save you up to 70% on your conveyancing costs. All our conveyancing partners have passed our strict verification process for your peace of mind. This means they are all regulated by either the SRA, CLC, LSS, LSNI or CILEx.
Need a Surveyor?
Once you've found a conveyancer, you soon might need the help of a RICS property surveyor. Simply fill in our integrated conveyancing and surveying comparison form to get connected today.
By filling out a few extra steps. We will then connect you with local conveyancers and surveyors to save on the whole process.
