Right to buy: your right to buy your home

Understanding the Right to Buy Scheme

The "Right to Buy" scheme, introduced in 1980, is a significant policy designed to increase home ownership among tenants by offering them the opportunity to purchase their rented property at discounted rates. Over five million council tenants have benefited from this initiative, marking it as one of the most impactful social revolutions of the century.

Here’s what you need to know about the Right to Buy scheme and how it can help you become a homeowner:

Eligibility for Right to Buy

You may qualify for the Right to Buy scheme if you are a secure tenant of:

• A local authority

• A London borough council

• A Housing Action Trust

• A registered landlord (non-charitable)

Tenancy Requirements:

• For Tenancies Before January 18, 2005: You need to have at least two years of public sector tenancy.

• For Tenancies Starting on or After January 18, 2005: You must have a minimum of five years of public sector tenancy.

Financial Considerations

Buying a home can be costly, but the Right to Buy mortgage can help cover these expenses. Most lenders offer 95% to 100% financing for the Right to Buy amount. To find such lenders, thorough research is essential.

Discounts:

• Houses:

  • 32% discount after two years, increasing by 1% for each additional year of tenancy, up to a maximum of 60%.

• Flats:

  • 44% discount after two years, increasing by 2% for each additional year of tenancy, up to a maximum of 70%.

For tenancies starting after January 18, 2005:

• Houses: 35% discount with an additional 1% for each year, up to a maximum of 60%.

• Flats: 50% discount with an additional 2% for each year, up to a maximum of 70%.

Regional Maximum Discounts:

• London or South-East: £38,000

• Eastern Region: £34,000

• South-West: £30,000

• North-West or West Midlands: £26,000

• Wales, East Midlands, Yorkshire and the Humber: £24,000

• North-East: £22,000

Application Process

1. Initial Application: Complete the RTB1 form to apply for the Right to Buy.

2. Eligibility Notice: You will receive a RTB2 form, which confirms your eligibility for the Right to Buy.

3. Price and Terms: Review the Section 125 document carefully, which outlines the purchase price and the terms and conditions.

Important Considerations:

• Ineligibility: The Right to Buy scheme does not apply to sheltered housing for the elderly, temporary accommodation, or homes provided by your employer.

Benefits of the Right to Buy Scheme

• Affordability: The scheme allows tenants to purchase their homes at significantly discounted rates.

• Community Stability: It encourages tenants to remain in their neighborhoods, fostering stable communities.

• Home Ownership: It provides a realistic opportunity for tenants to become homeowners, transforming their social and economic status.

By understanding the Right to Buy scheme and its implications, you can make an informed decision about purchasing your home and take advantage of this opportunity to achieve home ownership.