The Right to Buy Scheme allows most council tenants to purchase their council home at a discount.
There is eligibility criteria to meet for this scheme, which includes (but not limited to):
There are some exceptions to the rules and some properties won't be eligible for this scheme. The landlord will confirm eligiblity for the Right to Buy Scheme.
Discount available
The longer you have lived in the property, the greater the discount you are entiled to. For tax year 2023/2024, the maximum discount is £96,000 (unless you live in London where the maximum discount is £127,900).
There is a higher discount for flats than houses.
The discount acts as the 'deposit' for the property purchase, so a personal deposit isn't necessarily required.
There are other factors that could affect the discount.
Qualifying period
The discount you receive is subject to the time you have spent as a public sector tenant with:
Selling the property after purchasing through the Right to Buy Scheme
The property can be sold at anytime after the purchase has completed, however, the discount will have to be repaid if the propert is sold within a certain number of years.
Within 1 year
If you sell the property with 1 year of purchasing through the Right to Buy Scheme, all of the discount will be repaid on sale.
Within 5 years
If you sell the property within 5 years of purchasing under the Right ot Buy Scheme, a portion of the discount will be repaid.
The discount repaid is tiered:
After 5 years, the property can be sold without repaying the discount. In addition, the amount of discount repaid will be a percentage of the resale value.
Within 10 years
If the property is sold after 10 years from the purchase through the Right to Buy scheme, there is the 'Right of First Refusal'. The property must be first offered back to the former landlord or to another social landlord in the area. The full market value will be agreed between the parties: if the offer hasn't been accepted within 8 weeks, the property can be sold on the open market.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.
Please note that some mortgages, such as commerical Buy-to-Lets, are not regulated by the Financial Conduct Authority (FCA).