Right to Buy

 

Who has the Right to Buy?

 
If you are a secure tenant, and have been one for at least three years, you probably have the Right to Buy. Please read the following publications for further information.
 
Valuations & Discounts
Properties are valued at the current market rate. The Council will cover the cost of this valuation. Some improvements which you may have carried out to the property will be disregarded for the purposes of the valuation. You will receive a discount on this value.  The amount will be dependent on your qualifying period. This is the time you have spent, in total, as a public sector tenant or in accommodation provided by the armed forces.
 
For Right to Buy you must have been a public sector tenant for at least three years in order to qualify. You may include time spent with different landlords at various addresses and the dates do not have to follow one another. If you took on a tenancy from your parents, you can include the years lived there from as early as your sixteenth birthday. If you are buying jointly with someone else who has a longer qualifying period than you, you will get their higher qualifying discount. If you live in a house your discount will be between 35% and 70%. If you live in a flat your discount will be between 50% and 70%. Please note that the maximum cash limit on discount for all properties is £77,900. Please take care when filling in your application form as it is a legal document and all information must be correct and entered into the correct section. Make sure that you put in all of the necessary information as this could affect the amount of discount you receive.
 
Once you have received your valuation
You will then be sent an Offer Notice. The Offer Notice includes a description of the property and any land included, the price at which you entitled to buy, the valuation at the relevant time, the improvements which have been disregarded and the discount to which you are entitled.  For a leasehold property the Offer Notice will also come with an estimate of the service charge and the cost of repairs and improvements for the next five years. Once the Offer Notice is sent to you, you need to read all of the information and decide whether to withdraw from the Right to Buy or to continue with your purchase. If you decide to withdraw there is no penalty for doing so and you are free to re-apply in the future if you so wish.  If you decide to continue with the purchase you need to let us know.
 
Costs
You will probably need to arrange a mortgage for the purchase, and we recommend you enlist the help of a solicitor.  The solicitor will carry out the purchase on your behalf, and will charge fees which are payable at the time of purchase. You may have to pay Stamp Duty.  This is a percentage of the price you pay for the property. You will also be liable for your lender’s survey fees, which will depend on what level of survey you have, from a basic valuation survey to a full structural survey.
 
A leasehold property is usually a flat or maisonette. You are buying the lease for approximately 125 years. As a leaseholder you will be subject to annual ground rent, service charges and maintenance charges. Failure to pay these charges could result in the Council, as freeholder, approaching your mortgage lender for the money or ultimately repossessing the property through a forfeiture order.
 
Repairs and Maintenance
When you purchase the property under the Right to Buy, the Council is no longer responsible for any repairs or maintenance. Whilst your application is being processed, the Council will only be responsible for essential repairs. If you are buying a house or a bungalow, you will probably be purchasing the freehold of the property. This means that the maintenance of the property will become your responsibility.  You should be aware that this could include some significant costs such as roof and window replacement. If you are buying a leasehold flat or maisonette, we will give you estimates for works anticipated in the first five years of your lease. This estimate, together with other maintenance costs such as caretaking and grounds maintenance make up part of your annual Service Charge.  For the first five years of your lease the actual Service Charge cannot exceed the estimate. You should be aware that after five years have elapsed, you will be responsible for your share the Council’s costs of any works carried out on your building, and that major works such as roofing work can result in a large bill. If you purchase under the Right to Buy and you sell the property within five years of the purchase date you will be liable to repay a percentage of the discount based on the change in the value of the property and the number of years of ownership.
 
A note of caution
Remember that a house or flat will probably be the most expensive thing that you will ever buy, and that the costs involved will carry on over a long period.  If you borrow the money through a mortgage to help you to buy it, you have to pay the money back every month until it is paid off, usually for 25 years.  Interest rates can go up or down, depending on decisions made by the Bank of England and the mortgage lender, so, unless you have a long term fixed rate mortgage, there is no guarantee of your monthly repayment amounts remaining constant.   You are liable for payments every month, even if you are ill or out of work. If you fail to maintain your repayments, your mortgage lender may seek to repossess your home, leaving you homeless. You should also consider that as a homeowner you will need to insure your property against damage or fire. If you take out a mortgage, your lender will insist that this cover is in place. You should also consider insurance to protect the mortgage payments in the event of your death, illness or redundancy.
 
For further information
If you live in the Arun area you can get further advice, application forms and copies of the booklet ’Your Right to Buy Your Home’ by calling the Right to Buy Officer on 01903 737724.   Alternatively you can collect one from Arun District Council, at the Civic Centre in Littlehampton.