Council Houses - Your Right to Buy

For many years council or social housing was one of the backbones of British living. But since the middle of the 1980s there’s been a move to sell off much of the stock of council houses to the people who live in them as part of the movement towards private ownership. Since the big initial sell-off, which saw people who’d never dreamed of it before owning their own properties, it’s something that’s continued, and if you’re a council tenant, you may very well be eligible to own your house or flat. The really good news is that, if you qualify, you’ll be able to buy it at a discount.

Who Qualifies?

You have the right to buy your council property if you’ve been a secure tenant for more than two years (if you moved in after 18 January 2005 you won’t be eligible until 2010). The property must be self-contained and be your only home.

Housing association tenants might also have the same right, but that’s more dependent on circumstances. The property would need to have originally been a council property, with the ownership transferred to the association. You would also need to have been the tenant before and after the transfer occurred. Then, and only then, you may qualify for what’s called a Preserved Right to Buy.

There are some points that are worth knowing beforehand, though. If you’re on housing benefit to help pay your rent, you’d lose that if you were an owner-occupier. Income support might be possible, but it would take 39 weeks to come through.

If there’s a possession order against you regarding the home, if you’re an undischarged bankrupt or have a pending bankruptcy petition, or you have an arrangement with creditors but have paid all your debts, you’re not eligible under the scheme.

Something to remember is that if you buy a council house, you get the freehold. With a flat you obtain the leasehold, but you will probably also have to pay a service charge – how much will depend on the building and the council.

Discounts

To make the proposition of buying your council house more attractive, they’re sold at a discount. How much less you pay varies, and there are definite monetary limits. Understandably, the longer you’ve been a tenant, the less you’ll pay. The discount is from the market value of the house, which will obviously vary from area to area.

If you’ve been in your house or flat for five years, you qualify for a 35% discount – which is a very healthy figure. But it gets better; if you’ve spent 20 years in the property (and many have) the amount rises to 50%.

Each area has a maximum figure, and it can go from £16,000-38,000, but you’ll need to contact your own council for more exact percentages and figures. The discount might also be affected by the amount (if any) the council or landlord has spent on the house for repairs and improvements.

One thing you need to remember is that, if you buy the property and sell it within five years, you’ll need to repay part or the entire discount you were given. This discourages speculation, and makes sure there’s a continuity of residency. If you want to sell within 10 years you’ll need to offer it at market value to the council or housing association, or another body mandated by the Secretary of State.

Moving Ahead

The first step you’ll need to take is to fill out an application form, which can be downloaded or obtained from your council or housing association. After it’s been reviewed, you’ll receive a Section 125 notice if you qualify to buy. It will detail the market value, any structural problems, what discount you’ll qualify for, and what you might have to pay in service charges and improvements over the next five years, as well as any terms on conditions that might apply to the sale. If you disagree, you can appeal to the District Valuer. However, be warned: his decision is final, and if he comes up with a higher price for the house, that’s what you’ll have to pay.

After receiving the Section 125 notice (or the Valuer’s figure) you’ll have 12 weeks to decide whether you want to go ahead with the purchase. You should have the property surveyed and talk to a number of lenders before making your final decision.