Right to Buy Process
After consulting the terms specified in the offer notice provided by the council, you may choose to go ahead and buy your home. In which case, it is essential that you inform your council of your decision in writing.
At this point, the technicalities of the property purchase will be handled by your mortgage provider, your solicitor and your council. However, the importance of seeking qualified independent advice cannot be overstated. Particularly when it comes to considering mortgage options, which can be surprisingly complex and time consuming to organise.
This is where any forward-planning you carried out is likely to prove beneficial. If you need any help or support on any aspect of the home purchase process, book an obligation-free consultation with UK Property Finance anytime.
Arranging a Mortgage and Survey
Arranging a mortgage can be the trickiest and lengthiest part of the process. Eligibility for a home loan is typically determined on the basis of income, financial status and credit history. However, there are various loan options available to suit the needs of subprime applicants.
Rather than taking your business directly to a lender, we strongly advise speaking to an independent specialist. Whatever your financial position and credit history, UK Property Finance are best placed to find the perfect loan to suit your requirements and your budget. When applying for a mortgage, the lender will organise for a surveyor to inspect and value your property.
Finding a Solicitor
The legal aspects of residential property transactions are normally too complex to be handled by anyone without extensive legal training. You’ll therefore need to hire a solicitor (aka conveyancer) to take care of the legal side of the transaction.
Use customer reviews and recommendations to find capable and qualified legal advice you can trust, being sure to establish their fee structure ahead of time.
Note – some mortgages offer a free legal and valuation service
You Wish to Proceed
It’s worth remembering that until the contracts have been signed and the mortgage advance has been transferred, you are not yet under any obligation to go ahead. It is still possible to change your mind at this late stage, but you will still be liable to pay your solicitor’s fees. If you run into any concerning issues along the way, contact UK Property Finance for advice.
Contracts, Payments and Completion
Once you’ve successfully arranged finance for your property and are satisfied with the terms and conditions of the sale, the purchase can go ahead. Deposits are not always required however if you do need to provide a deposit to qualify for a mortgage this must be with your solicitor before the transaction can go ahead.
Any fees and charges payable must also be met at the time the deal is finalised. If there are any outstanding rent payments, these must have been paid to the council by the date of completion. The transaction can be delayed or even cancelled if there are outstanding rent arrears at this stage.
When the contracts have been signed and the funds have been transferred, you are now the official legal owner of your own home.
Receiving Your Offer Letter – Appeals
When you receive your Section 125 Notice – also referred to as your offer letter – it is your responsibility to read it thoroughly and carefully. This is the formal document that indicates the market value of your property, the discount you’re entitled to, the purchase price including the discount, any structural issues identified and additional terms and conditions as required.
In the event that you are dissatisfied with any of the terms or values set out in the letter, you have the right to appeal against them.
For example, if you do not believe that the specified value of your property is fair or accurate, you need to inform your landlord accordingly within three months of the letter’s receipt. At which point, the case will be referred to the district valuer, who will carry out an independent valuation of the property. It’s advisable to provide the district valuer with your reasoning for challenging the valuation, along with any supporting evidence or documentation to back your claim.
The property will be inspected by the district valuer, who will subsequently come up with a value for the property and provide the landlord and the tenant with a report. At this point, the district valuer’s valuation of the property becomes final and legally binding. Irrespective of whether you disagree with it to a greater extent than before, there is now nothing you can do about it. Hence, you need to think very carefully about whether to appeal in the first place.
Contact the experts at UK Property Finance anytime if you have any questions regarding the value of your home.
You will also be contacted by the district valuer if they come up with the same value for your property as your landlord did. Another Section 125 notice (offer letter) will then be sent to you by your landlord. In the event that the district valuer’s valuation is different, a Section 128 notice will be sent to the tenant indicating the new value of the property, discount amount and purchase price accordingly.
From the date of the offer letter you receive, you will have a fresh 12-week period within which to indicate your intent to proceed or cancel the application.
If you are dissatisfied with any other information in your offer letter, your first port of call should be your council. For example, if you are not happy with the conditions of sale, service charges or the size of the discount offered, it’s best to discuss the matter with your council first of all. If you are unable to reach an agreement, you have the right to take legal action, though doing so can be expensive.
To discuss the available options in the event of a dispute with your landlord, reach out to a member of the team at UK Property Finance anytime.
Opting out of the Agreement
Always remember that you are under no obligation to go ahead at this early stage. If you are unable or unwilling to agree to the terms of the offer letter, you must inform your landlord in writing that you have decided not to buy. The application will be terminated, but this will not affect your eligibility to apply again at a later date.
Dealing With Delays
All councils are obliged to fulfil their Right to Buy requirements within a certain period of time. Should they fail to do so, you may be eligible for an additional discount on the price of your property.
It is up to your council to determine whether or not you are eligible, which will involve considering all aspects of your application and your case in general. Confirmation is sent by way of a Section 124 notice (RTB2), which in most instances must be sent by the council within four weeks. If you have been with your current council for less than three years, they have eight weeks to send a Section 124 notice.
If you are confirmed as eligible by your council, they are then obliged to provide you with an S125 formal offer letter within 8 weeks for a house or 12 weeks for a leasehold property.
Important Note: councils delay decisions and responses for a variety of reasons, which they may attempt to claim are not their fault. Your council may dispute the date you send your application and the information you provided, so it’s important to keep a copy of all the information you send along with proof of postage and delivery.
Additional Discounts in the Event of Delays
In the event that your council fails to meet their obligations as detailed above, the tenant should:
- Complete an ‘Initial notice of delay’ form (RTB6) and send it to their council.
- Obtain independent specialist advice at the earliest possible stage.
- Complete and send an ‘Operative notice of delay’ form (RTB8) to the council if they do not respond to the first notice within a month.
Though you will be required to continue paying rent as normal, any additional rent payments incurred due to delays on the part of your council may subsequently be discounted from the price of your property.
As it is in everyone’s best interests to avoid delays, it is comparatively rare for things to progress to this stage. However, it is also important to know when and where to seek specialist support, if for any reason your council is being uncooperative, or failing to meet their obligations.
If you have any questions or concerns regarding potential delays to your Right to Buy application, contact a member of the team at UK Property Finance anytime.
Delays – Notice to Complete
Under the terms of the Right to Buy, there are instances where your council may require a response from you within a certain time frame. If you fail to meet these requirements set out by your council, they may have the right to terminate your application. However, they are legally obliged to provide you with formal notices of warning, before doing so.
If you receive a notice to complete, it is important to ensure you meet any deadlines set out therein. If you are unable (or unwilling) to do so or you feel your council is making unreasonable demands, speak to a Right to Buy specialist at UK Property Finance for more information.
A Default Notice is issued when a Right to Buy applicant fails to respond to the offer letter they receive within 12 weeks. Tenants typically have no more than 28 days to respond to a Default Notice. If the council doesn’t receive a response within this time, the application may be cancelled.
There are instances where this 28-day deadline can be extended, though exclusively at the discretion of the council. An example of which could be where an individual was seriously ill or in hospital at the time.
First Notice to Complete
If you decide to accept the offer, you will of course need adequate time to formalise your mortgage and make other important arrangements. Nevertheless, councils have the right to issue a notice to complete, if they believe the tenant is delaying the process unnecessarily. Upon receipt of a first notice to complete, the tenant has 56 days to complete the transaction.
Final Notice to Complete
If no response is provided to the first notice to complete, a final notice to complete may be issued. This provides the tenant with an additional 56 days (minimum) to complete the property purchase. The failure to respond to a final notice to complete can result in the application and transaction being terminated.
Important Note: cancellation of an application at any time and for any reason does not affect the tenant’s eligibility to apply again at a later date. However, it will be necessary to start the application process again from scratch.
In order to avoid complications, it is advisable to maintain good communication with your council throughout the process. If you have any questions or concerns regarding potential delays and resulting compensation, speak to a member of the team at UK Property Finance.
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.