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Right to buy questions?

Council Right to Buy: Frequently asked questions on RTB

Q. What is Right to Buy?

The Right to Buy was introduced in 1980. It means you can buy your council home at a discount to the full market value. Your discount is based on the number of years you have spent as a public sector tenant.

Q. What discount am I eligible for?

You must have been a public sector tenant for at least 2 years. If you live in a house, your discount will be between 32% and 60%. If you live in a flat, your discount will be between 44% and 70%.

However, there is a ceiling on all discounts. This varies according to where you live. For example, if you live in the West Midlands, the maximum discount is £26,000. The regional discount ceilings are listed on page 9 of the advice information.

Q. Are there any other limits on discount?

Yes, two:

1. a special rule called the cost floor may apply. Your discount will be reduced to reflect what your landlord has spent on building, buying, repairing or improving your home during the last 10-11 years before you apply to buy; and
   
2. if you have previously bought another council property, any discount that you got then will usually be deducted from the discount that you get when you buy again.

Q. What is Rent to Mortgage?

If you want to buy your council home but can't afford to pay for it all at once, Rent to Mortgage lets you pay for it by instalments. To start with, you pay a lump sum that is less than the right to buy price (ie, the market value less your discount). Your landlord retains a share in the property and you can buy his share when you can afford it. The scheme is called 'Rent to Mortgage' because if (like most people) you pay your initial lump sum by getting a mortgage, your mortgage repayments will be about the same as you were paying in rent.

Q. What is Preserved Right to Buy?

If you are a secure tenant of a local authority, and your home is transferred to a Registered Social Landlord (for example, a housing association), you may still have the Right to Buy, although on slightly different terms.

Q. What is a leaseholder?

If you buy a house you will usually buy the freehold. This means you will be the outright owner. If you buy a flat, you will become a leaseholder. Normally, this means that you will be responsible for the interior of your home whilst your landlord will be responsible for looking after the structure and the exterior of the block. He will ask you to pay for major repair and improvement works, through service charges. These can be high - sometimes as much as several hundred pounds each year, or even more if your block needs major repairs.

Q. Can I resell my home after purchasing it under the Right to Buy?

You may sell your home whenever you like. But if you sell within three years of buying it, you will have to repay some or all of the discount that you received. If you sell:

• during the first year, all of the discount will have to be repaid;
  
• during the second year, two thirds must be repaid; or
  
• during the third year, one third must be repaid. After three years, you can sell without repaying any discount. But if you live in the country, you may only be able to resell to the council or to a person who lives or works locally.

Q. What happens if my landlord delays the sale?

Landlords have to deal with right to buy applications within certain time limits. If there is a delay because (for example) your landlord hasn't sent you the right form or notice when he is supposed to, you may be able to get the purchase price reduced.

Q. Who values my home if I want to buy it?

Landlords have to do this. If you think your landlord has valued your home too highly, you have a right to an independent valuation from the District Valuer. But you have to accept his valuation, even if it is higher than the landlord's.

Q. Do I have to complete the purchase within a certain time?

No. You can take all the time you reasonably need to get a mortgage or legal advice. You can also take your time to discuss the terms of sale with your landlord. But you should let your landlord know as soon as you are ready to go ahead and buy. If he doesn't hear from you for a long time, you may get a warning notice asking you to either complete the purchase or to discuss any problems. If you don't respond to this, you may receive a second notice asking you to complete the purchase. If you don't do this, your application will be withdrawn.

Q. Can I apply to buy if I have rent arrears?

Yes. But your landlord is not bound to complete the sale if you have not paid all the rent or any other payment within four weeks from the date you were asked to pay it. Also you may lose your secure tenancy and no longer have the right to buy if your landlord has obtained a suspended possession order against your property as a result of your rent arrears which you subsequently breach.

Q. Is your council house a goldmine?

Complete the no obligation application form below and one of our brokers will contact you and provide you with all the details you need to take the next steps.

© Crown Copyright (Correct at time of writing January 2005. Please check with your financial services provider for any changes.)