Are you aware of the Right to Buy? If you are either a tenant of a housing association or local authority you may have the right to buy your home at a discount due to the period you have been living there as a tenant.
The Right to Buy is literally what the text states: the right to buy your home. It allows a discount on the price of purchase of your home according to the length you have lived there. The Council, in turn, can use the money gained towards 30% of the price of further homes. Where they do not use the funds they have to be passed, with interest, back to the Government.
Purchasing the home, you already call ‘home’ is surely an appealing prospect. Knowing what you have made yours as being legally yours is a satisfying achievement. So, if you are in a position to consider this, we want to make sure you are aware of some of the ins and outs before going ahead.
You are eligible to buy the home you are living in under the Right to Buy scheme if you:
There is also a scheme operating in a similar fashion to the Right to Buy scheme known as the Preserved Right to Buy. This applies to a person who, whilst renting as a secure tenant of the local authority, underwent a change of landlord to a registered provider, such as a housing association. If such a person later moved to a different property owned by the new landlord they would still be eligible to apply.
*A public sector tenant is a person who rents their home from a public body or a ‘Right to Buy landlord'.
As the Right to Buy is a purchase of property the usual processes associated with buying a property will apply such as, for example, the likelihood of applying for a mortgage and the conveyancing process. It is recommended, therefore, that you seek legal and/or other professional advice regarding this. In addition to all the standard procedures carried out in order to purchase a property there are specific steps which need to be taken to get your Right to Buy purchase started.
The discount rules -
The attractiveness of the Right to Buy scheme is not just the prospect of owning the home you already live in but the discount which applies to the cost of purchase. The discount increases the longer you have lived in your home, where the maximum discount entitlement is £82.800 and £110,500 for London homes. The discount increases each year in April.
For those whose home is a house and have spent three years as a public sector tenant, they are eligible for a 35% discount off the purchase price. This increases after five years of tenancy by 1% each year. , For those who live in a flat, the discount after three years is 50% and rises after five years by 2% each year. The maximum discount possible is 70%. The tenancy does not have to span one home but could be several public sector tenancies due to a change of homes.
You will become an owner rather than a tenant -
Whilst it may be obvious that there are differences between renting your home and owning it, those differences could affect your budget considerably so need to be considered when deciding to take advantage of the Right to Buy. For example, you will need to set aside a budget to:
Here are some tips you might not otherwise have been aware of:
Buying a property is likely to be the most expensive purchase an individual makes within her lifetime and the discount offered through the Right to Buy scheme could provide the only opportunity to lower-income individuals to make such a purchase. Detailed information on the scheme can be found here.
Our team at Online Conveyancing Solicitors can assist in dealing with your Right to Buy conveyancing. Contact our team either today for a no-obligation quote.
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