The government’s Right to Buy scheme has been revamped and improved to help council tenants buy their current properties. For those able to afford a mortgage it can often mean not having to find the money needed for a mortgage.
Those who have received bad credit payday loans or similar may have to ensure their credit is in order before applying. If you are not sure, read on, as Cash Lady tell you all about the Right to Buy scheme.
Am I eligible for the Right to Buy scheme?
In order to qualify, you must have been a public sector tenant (council, housing association or NHS Trust) for a minimum of three years. The three years must be the total amount of time and doesn’t not necessarily continuous.
You will not be able to apply for the Right to Buy scheme if:
- You are being declared bankrupt
- You are in debt to creditors
- There is an undischarged bankruptcy against your name
- You have been told to leave your home via court order
- The property is not your main home
- You do not live in a self-contained property
- Your tenancy is introductory instead of secure
What is the most I can claim through the Right to Buy scheme?
The maximum you can claim for eligible countries in the UK are:
- £77,900 in England (£103,900 in London)
- £24,000 in Northern Ireland
- £8,000 in Wales
The Right to Buy scheme no longer exists in Scotland as of 31st July 2016.
How much you will receive will depend on a few things such as the amount of time you have been a council tenant, the type of property you live in, and the value of the property you want to buy.
The most you can be given for a council flat is 70% of its value. 50% is available to council tenants of 3-5 years, increasing by 2% for every additional year of tenancy, before being capped at 70%.
For council houses, tenants of 3-5 years are eligible for 35%, which increases by 1% for every year of tenancy, with 70% also being the maximum available.
In any scenario, you will not be able to claim more than stated in the bullet list stated above.
What is the Cost Floor Rule?
The Cost Floor Rule could affect the amount of money that will be deducted from your property value. The rule enables your landlord (which will usually be the council) to claim back any money spent on repairing your property over the past 15 years. This can be applied even if you haven’t lived there for 15 years.
How can I apply for the Right to Buy scheme?
To begin your application you must download and fill in the RTB1 application form.
Once completed, you must send this to your landlord who must respond within four weeks to inform you whether or not you can buy your home. However, they have eight weeks to reply if they have been your landlord for a period of fewer than five years.
If you are able to buy the property, they will send an offer via a Section 125 notice which will tell you the price that has to be paid, along with your Right to Buy discount rate and other relevant information.
You then have twelve weeks to either accept or reject the offer.
Can I object to the offer?
Yes, the HM Revenue & Customs can be used to obtain an independent valuation if you feel it is too high. This must be done in writing to your landlord within three months of receiving the offer.
Will I need a mortgage?
You will also have to apply for a mortgage and put down a deposit for the property – unless you have the money to buy it outright.
Most commercial lenders have specific Right to Buy mortgages available. Before committing, shop around to find the best package available.
Can I use the Right to Buy discount for a deposit?
Yes, most mortgage lenders will allow you to use the discount for the deposit, so you will not have to find it yourself. Bear in mind there are some lenders who may expect you to put down an additional deposit.