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.

Valuation Appeals

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.

Additional Challenges

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:

  1. Complete an ‘Initial notice of delay’ form (RTB6) and send it to their council.
  2. Obtain independent specialist advice at the earliest possible stage.
  3. 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.

Default Notice

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 Notecancellation 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.

Right to Buy is an affordable housing scheme open exclusively to council property tenants (and some housing association tenants). Qualifying tenants upon meeting specified length-of-tenancy requirements are automatically given the right to purchase their home, with discounts available of up to £82,800, increasing to £110,500 for qualifying properties in London. Lower discounts of £24,000 and £8,000 are available in Northern Ireland and Wales respectively.
The UK government introduced the Right to Buy scheme to help public-sector tenants purchase their homes with potentially huge discounts from their actual market value. Right to Buy was introduced by the UK Government in 1980, though initial property discounts were relatively low - up to £16,000 maximum. Discount amounts were subsequently increased on an annual basis to reflect inflation and are now significantly more generous, opening the door to potential home ownership for more tenants than ever before.
It is already possible to qualify under the Right to Buy scheme to purchase a housing association property. However, there are specific terms and conditions governing the program. Tenants occupying ex-council houses who lived in the property at the time it was transferred to a new landlord have what’s known as ‘Preserved Right to Buy’. Otherwise, Right to Buy may qualify under a secondary ‘Right to Acquire’ scheme, for which discounts of £9,000 up to £16,000 are available. Contact your landlord or local housing association for more information.

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.

If you purchase your property under the Right to Buy, you are perfectly entitled to let it out to tenants. However, you must inform your local council of your new address - i.e. where you will live while renting out your property.
Upon receipt of your application to purchase your property under the Right to Buy, your landlord is typically obliged to reply with a decision within four weeks. This is sometimes increased to eight weeks, depending on your length of residency in the property. A complete offer notification including the value of the property, the discount you are eligible for and the resulting purchase price for your home will be sent within no more than 8 weeks for a house, or 12 weeks for a leasehold property. If you choose to go ahead, it will then be your responsibility to organise a mortgage and the general administrative/legal side of the purchase process. From start to finish, it typically takes at least 3 to 6 months to purchase a property under Right to Buy, although it can be quicker.
Not necessarily, as many lenders accept the discount on the property’s value as the deposit. Depending on the lender, you may therefore not need to provide any deposit. Nevertheless, this is determined on a case by case basis. In some instances, your deposit obligations will be exactly the same as if you were purchasing a property through the normal channels. Right to Buy mortgage lenders in the UK require deposits of anything from 0% up to 20%, which must be paid before the mortgage completes. If you have concerns as to your ability to cover the necessary mortgage, contact a member of the team at UK Property Finance to discuss the alternative options.
The typical maximum discount available on a property in England is £82,800, increasing to £110,500 for qualifying properties in London. It is also possible to qualify for a discount under the Right to Buy scheme in Northern Ireland and Wales, where the maximum discounts available are £24,000 and £8,000 respectively. Anyone interested in purchasing a property outside England should consult with the relevant government website using the links below:
Possibly however the deposit you need to pay will be determined entirely by the size and nature of the mortgage you need to pay for your home. There are various different types of mortgages available, along with alternative secured lending options and general property finance packages. To discuss the available options and assess your suitability, contact a member of the team at UK Property Finance anytime.
Stamp duty is payable on all properties in the United Kingdom, including those purchased under the Right to Buy scheme. Stamp duty is only payable when purchasing a property with a value in excess of £125,000. Most property purchases are subject to the usual 3% stamp duty, which is payable at the time of the property purchase by the individual (or individuals) buying the home.
The maximum discount currently available under the Right to Buy scheme in England is £82,800, increasing to £110,500 for qualifying properties in London. Discount amounts are revised and updated every April, in line with inflation, For more information on any of the above issues or to discuss your eligibility for a Right to Buy discount in more detail, contact a member of the team at UK Property Finance today.
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