Since the 1980s, many council tenants have been eligible to purchase their homes at a discount through the Government-backed Right to Buy scheme and, as with any residential property purchase, the services of an experienced conveyancing solicitor are essential to ensure all legal formalities are completed correctly.
Eligible tenants are those who have rented from their local authority for at least two years, or five years if they became tenants after 18 January 2005. Previous council tenants, whose properties were transferred to housing associations and have a preserved right to buy through living long-term in a property, may also be able to apply.
The amount of discount which will be taken off the purchase price depends on two factors: the length of residency and with which local authority the house or flat is registered. The current landlord will be able to give a figure on request.
For example, after a tenancy of five years, the discount of the market value is 35% and for 20 years, it is 50%. However, there is a maximum level of between £16,000 and £38,000, depending on the geographical location.
Purchasers who want to sell their property within five years of buying it may have to pay back the discount.
After a tenant has made an official application for Right to Buy to the local council, a decision will be made on qualification, then, if approved, a Section 125 notice will be sent detailing the price, discount, estimates of service charges and improvement costs for the following five years, any structural problems of the property, and terms and conditions of the sale.
Experienced solicitor is essential
A tenant can seek an independent valuation from the District Valuer, whose decision is final, so there is a risk that if the valuer's figure is higher than that of the council, the valuer's price will be the one which has to be paid.
There is a 12-week limit after receiving the Section 125 notice for the tenant to decide if he or she wants to go ahead with the purchase and this is the time to consult a mortgage lender and a residential conveyancing solicitor, especially one who has experience in Right to Buy transactions.
It is particularly important to protect the interests of a tenant's partner or spouse if he or she is applying for the mortgage but does not qualify for the Right to Buy.
Once the property purchase has reached this stage, it should proceed in the same way as home conveyancing by any other method.
Lawyers act as intermediaries with the council as seller of the property, the mortgage lender and the future owner, ensuring completion of the contract through to Land Registry administration and transfer of funds.
A Government booklet, Your Right to Buy Your Home, is available from local authorities or from the Direct Gov website and gives details of all the rules applying to the scheme.
Right to Buy and Healys solicitors of London and Brighton
About 70% of the UK population live in their own home and with the Right to Buy scheme council tenants can also become property owners wherever they live.
Having a specialist residential conveyancing solicitor who is used to the formalities of all types of property transactions will help to ease this unfamiliar administration for you. The team at Healys makes a point of explaining everything in easy to understand terms so that you can feel assured of being guided at every step of this major undertaking.
To help you budget for the financial commitment, you can apply now for an online quote for the cost of the conveyancing service or contact us in London or Brighton by email or telephone and you can be sure there will be no hidden fees.
If you want to become an owner-occupier, put yourself in the safe hands of Healys' residential conveyancing solicitors for an efficient, cost-effective and professional service.
