Do I have the right to buy?
You will probably have the right to buy if you are a secure tenant of a right to buy landlord and have spent the last 3 years as a public sector tenant. You may also have the right to buy if you were previously a secure tenant but are now an assured tenant of a housing association as a result of a stock transfer by your previous landlord.
You can only purchase the property if it is your only or principle home.
You cannot exercise the right to buy if the court has made a possession order against you as a result of a breach of your tenancy.
The longer you have been a tenant the more discount you get.
If you have been a tenant for 3 years you will qualify for a discount of 35% if purchasing a house or 50% if purchasing a flat. The longer you have been a tenant the larger the discount up to a maximum of 70% or £103,900 in London and £77,900 outside of London. The maximum discounts are reviewed each year.
If your landlord has recently built the property or has undertaken repairs or refurbishment the discount you receive must not reduce the purchase price below what has been spent on it by your landlord in the last 10 years.
If you choose to sell your property after purchasing it you may need to repay some of the discount. If you sell the property within a year of purchasing it you would need to repay the full discount. The amount required to be repaid reduces each year. Once you have owned the property for five years you can sell it without having to repay any of the discount.
If the repayment of the discount would cause hardship your landlord may not require you to repay it.
If you wish to sell the property within 10 years of purchasing it you must give first refusal to your landlord to purchase the property at full market value. If they do not accept the offer within 8 weeks the property can be placed on the open market.
If the property is a leasehold property you will be responsible for paying ground rent and service charges in addition to your mortgage payments once you purchase the property.
Right to buy - how to apply
1. Complete an RTB1 form. This can be obtained from your landlord or downloaded/completed on the GOV.UK website - Right to Buy. You should send this by recorded delivery or hand deliver it and obtain a receipt so that you have proof that it has been received.
2. Your landlord must respond by sending an RTB2 confirming whether or not you have the right to buy within 4 weeks of them receiving the RTB1. If your landlord says you do not have the right to buy they need to explain why. If you disagree you can seek legal advice. For advice contact us on 0203 816 9282, our housing solicitors offer 30 minute telephone appointments nationally or face to face appointments in the North West for only £150.
3. If your landlord confirms that you do have the right to buy they must send an offer notice (Section 125 Notice) which sets out the price and terms and conditions of sale. They must do this within 8 weeks of sending you the RTB2 if the property is freehold and within 12 weeks if the property is leasehold.
4. If you disagree with the price you can obtain an independent valuation from the district valuer. If you wish to do this you need to tell your landlord within 3 months of receiving the Section 125 Notice that you want a “determination of value”. You then have 4 weeks to put your case to a district valuer. The district valuers valuation will be binding even if higher that your landlords valuation.
5. When you have decided whether or not to purchase your property you must tell your landlord in writing within 12 weeks of receiving the Section 125 or within 12 weeks of a district valuers valuation. If you do not respond in time your application will lapse and a new application would need to be submitted. This may mean that the valuation for your property will go up.
6. If your landlord is delaying the sale you may be entitled to a further reduction in the purchase price. You would need to send an RTB6 (Notice of Delay) to your landlord. If your landlord fails to respond you can send an RTB8 which may mean that the rent payable while the delay goes on will be deducted from the purchase price.