If you are a tenant of social housing you may have the ‘Right to Buy’ your property from the council.  Below I will discuss what you should consider if you are eligible for this scheme.


Firstly, you are purchasing your property at a large discount from its market value, meaning that you may not need to save for a deposit as the discounted price can act as your deposit in many cases.  This allows you to get a foot on the property ladder, an aspiration of many people in the UK, when you may not have the disposable income each month to save towards a deposit.


The size of the discount depends on how long you have been a tenant and the property type, be it a house or a flat.  You need a minimum of three eligible years as a tenant to be able to qualify and the discounts change over time.  After three years you get a 35% discount of the property value for a house or 50% for a flat.  There is then no change between years three and five of being a tenant.  After that, the amount of discount increases by 1% for a house and 2% for a flat per year up to a maximum of 70% or £78,600 across England (up to £104,900 in London boroughs).


You should consider that if you were to sell your property within the first year of ownership you would have to pay back the entire discount.  A sale in the second year would result in you needing to pay back 80% of the discount; in the third you’d need to pay back 60% of the discount; in the fourth it would be 40% and in the fifth it is 20%.  After that you wouldn’t need to pay any of it back.


Knowing the area and property well is surely a positive.  However, from a purchaser’s point of view, in owning the property its upkeep and maintenance becomes your sole responsibility.  You have to be ready for not only planned expenses but unplanned ones as well such as boiler breakdown, for example.


If you would like to purchase your home form the council you will need to check your eligibility first but you should seek independent financial advice when it comes to looking for the right mortgage for you.


Daniel Brown BSc (Hons), Cert SMP

28th August 2017

Right to Buy