How Just Mortgage Brokers Can Help You
Have you ever wondered: can I buy my council house? Well, courtesy of the government’s Right to Buy scheme – established back in 1980 – it is possible for some tenants of council property to buy the homes they currently rent. The process can appear complicated so below is a step-by-step approach to look at some of the relevant stages.
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Step 1: Check your eligibility
Here is where we start to answer the question: can I buy my council house?
The basic qualifying factor is that you must have been a council tenant for three years or more. If the property was sold by the council to another landlord, then you must have been the tenant at the time of that sale. (The three years’ tenancy do not have to be consecutive or in the same property.)
Next, some qualifying factors about you:
- You must not have any legal problems with debt.
- You must not have any outstanding possession orders against you.
And about the property:
- The property must be your only, or main, residence.
- It must not be specialist housing intended for disabled or elderly tenants.
- It must not be scheduled to be demolished.
Assuming that is all okay, move on to the next step.
Step 2: Work out whether you can afford to buy property
This is crucial to establish, and you are wise to look at the financial aspect early in the process. Any mortgage will be subject to affordability checks anyway, so you have to do the sums at some point.
Having the opportunity to purchase your council property is one thing but, for many, this will involve a mortgage and as such you will also need to establish if it is affordable for you. If you know the purchase and discount figures being offered to you (use your best estimate if not) these can be used to carry out some initial research for the monthly payments. Mortgage calculators can be a useful tool to do this or alternatively speak to a mortgage adviser. How does it compare to your rent?
Your other monthly bills will stay the same. However, there may be some additional costs to take into account, such as building insurance and possibly life insurance, if you do not already have it. Remember to add those into your costs.
You can now compare outgoings to income and see if it looks affordable on an ongoing basis.
Finally, work out the cost of the property purchase itself – remember, there will likely be survey fees, possibly stamp duty, mortgage arrangement fees – and check you have savings to cover those.
If you are asking yourself, “Can I buy my council flat?” remember that flats can have additional costs attached, such as annual service charges. These will also have to be budgeted for.
Step 3: Make an application to buy
If you are eligible, and confident you can afford it, the next step is to put in an application, using the “Right to Buy application” form (RTB1 notice). You can complete it online or else get a paper copy from your landlord.
If you are the tenant, you can make a solo application. Joint applications can be in joint tenancy names, or the names of up to three family members who have lived at the address for at least a year.
You should get a decision from your landlord within four weeks – or eight, if you have been their tenant for less than three years. If they say no, they will explain why. If they say yes, they should go on to make you an offer (see step 4).
Step 4: Receive the offer
If your landlord has agreed to sell, they will send you an offer notice (S125). That will take up to eight weeks to arrive for a freehold property, or 12 weeks for a leasehold property.
The offer tells you what the property is valued at and how much discount you will receive. It will also outline any known structural problems and any terms and conditions that will apply.
The amount of discount awarded depends on how long you have been a tenant, and whether the property is a house or a flat.
Discount for a house:
Basic discount: 35% (applies up to five years’ tenancy)
Additional discount over five years’ tenancy: 1% per year
Discount capped at: 70% or £78,600 (London £104,900)
Discount for a flat:
Basic discount: 50% (applies up to five years’ tenancy)
Additional discount over five years’ tenancy: 2% per year
Discount capped at: 70% or £78,600 (London £104,900)
Things to watch out for:
If your landlord does not reply by the deadline at any stage, or if you do not agree with the property valuation, you can appeal.
Step 5: Arranging the purchase
If you go ahead with the purchase, you will need to get a survey done (this is likely to be part of the mortgage application process if one is required) and, if you do not already have a solicitor, you will also need to appoint one.
You may also need to arrange a mortgage. If you are buying a property that needs some updating and asking how can I buy my council flat and put in a new kitchen as well, this is the time to see exactly how much you can borrow and confirm that you can afford the full amount.
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Here at Just Mortgage Brokers we have specialist advisers for all types of mortgages and access to deals that are not always available on the high street. Get in touch today for free initial advice and no-obligation quotes from our team of experienced brokers.