Purchasing a property can be complex and time-consuming. However, evaluating property finance options at the earliest possible stage can simplify the process significantly.
Every council is legally obliged to process Right to Buy applications within a specific time frame. If they fail to do so, the tenant may be eligible for an even bigger discount on the price of the property.
If you are interested in purchasing a property through the Right to Buy scheme, the process takes place over six stages as outlined below:
- Work out the costs and consider your budget
Right off the bat, you need to consider whether or not you can genuinely afford to buy your home. Use our Right to Buy calculator to see what kind of discount you may be entitled to, before working out the total costs of buying your home. If in doubt, seek independent professional advice at the earliest possible stage.
- Complete the application form
The RTB1 application form can be completed online, or you can print a copy out, fill it in and hand it to your council. The completed form can be submitted electronically or through regular mail – always use recorded delivery if sending such documents by post. If for any reason your council is uncooperative, speak to a qualified Right to Buy adviser for more information.
- Wait for the reply
In most instances, councils are obligated to reply with a decision within four weeks. However, this is extended to eight weeks where tenants have lived in the landlord’s property for less than three years. In the event that your council fails to keep to their deadline, contact a qualified Right to Buy adviser for support.
- Receive an offer
An S125 offer notice will be sent to you within 8 weeks for a house or 12 weeks for a leasehold property. This offer includes details of the property value, the discount you are eligible for, the total price payable and additional terms and conditions. If you are dissatisfied with the specified value of the property, you have the right to appeal.
- Organise your mortgage
You should already have a good idea in mind as to how you intend to finance the property purchase. This is the time to finalise your mortgage arrangements, which may involve surveys, solicitors, financial advisers and so on. Contact UK Property Finance to discuss the most affordable mortgage options to suit your requirements and your budget.
- Take ownership of your home
When you are happy with the terms and conditions specified by your council and you’ve financed the purchase of the property, you can officially take ownership of your home. After which, you are free to do with it as you wish – renovate it, decorate it, extend it and so on. If you have any questions or concerns about the Right to Buy application process, contact a member of the team at UK Property Finance anytime,
Determining Discount Amount
The discount amount you may be eligible for your property will be determined by multiple factors, including but not limited to the following:
- Previous discounts – If any of the tenants applying under the Right to Buy scheme have already purchased a discounted property under the same scheme or similar, this will reduce the discount amount. In the event that the previous discount was offered as part of a shared property purchase, a proportion of the discount will be taken away from the discount on the new property for each current applicant.
- Cost floor rule – The ‘cost floor rule’ typically applies when a property has recently been built or purchased by a council, or significant money has been spent repairing or maintaining it.If the cost floor is the greater than the discount value, the discount could be reduced to zero. In which case, the tenant will be required to pay the normal market price for their property. The qualifying period during which the cost floor rule applies with council properties is the 10 years immediately prior to the RTB application being submitted, or 15 years for council properties acquired or built after April 2, 2012.
- Repayment of Discount – It is important to note that if you purchase your property using a discount under the Right to Buy scheme, you will be liable to repay part or all of the discount if the property is sold within a given period after the RTB transaction is completed. This timeframe can change but as a guide line if the property is sold within the 1st year following the purchase, all the discount will require repayment, if the property is sold between years 1 and 2 then 2/3 of the discount will require repayment, if sold within years 2 and 3 then 1/3 of the discount will require repayment and if sold after the 3rd year, no discount will require repayment.
For more information on the various factors than can affect the discount amount on your home, contact a member of the team at UK Property Finance anytime.
There is an eligibility quiz on the official government Right to Buy portal. Check that out and answer a few simple questions to determine whether you may be eligible for an enormous discount on your home’s current market value.
Housing Association Tenants - Recent changes have affected eligibility for the Right to Buy scheme for occupants of housing association properties. Find out more and determine how much you could save by purchasing your home through Right to Buy.
UK Property Finance has extensive experience and expertise in all aspects of Right to Buy applications for council and housing association tenants alike.