Right to Buy

The Right to Buy scheme applies to most of the flats and houses that are owned by the Council.

There are some properties that are exempt from the Right to Buy scheme, for example those designated as aged persons' dwellings and sheltered housing (suitable for occupation by the elderly).

To buy a council home, a tenant must:

• be a secure tenant,
• If you were a secure tenant before the 18th January 2005 you have the right to buy after you have been a public tenant for two years.
• If you became a secure tenant after the 18th January 2005 you must have a minimum of five years as a public sector tenant - an introductory tenancy is a non-secure tenancy,
• not be subject to a court order for possession which says they must leave their home.
• not be an undischarged bankrupt.

A tenant may share the Right to Buy with members of their family who are over the age of 18 and who have lived with the tenant at the property for the past 12 months.

How the scheme works

When a tenant makes a Right to Buy enquiry, they receive a RTB1 form, a bankruptcy form and booklet. The form asks for the following details:

• name,
• the address of the property to be bought,
• any family members to be included,
• any previous addresses to be taken into account for discount calculation,
• any improvements made to the property.

This form and a full explanatory leaflet are available from any area housing office or telephone the Housing Services Unit on 01670 542253. You can also obtain a download of the Governments Right to Buy Leaflet here.

In order to start the process, a form RTB 1 and a bankruptcy form has to be completed and returned to any housing office. After initial checks are carried out on the property to be purchased, the Council's appointed valuer will arrange an inspection in order to assess its open market value.

An offer is then made based on the open market value less any discount that the tenant is entitled to.

The tenant then has 12 weeks to decide whether to proceed, cancel or appeal against the valuation. Tenants should note that during the time that a right to buy is registered, only emergency repairs will be carried out.

The Council can serve a first notice for you to complete within 3 months from the offer date.

Houses

Houses are sold freehold. The discount begins at 30% where the minimum qualifying period is met, with 1% for each extra year up to a maximum of 60%.

An external valuer values the property. The maximum amount of discount any buyer can receive is £22,000.

Flats

Flats are sold leasehold. The discount begins at 40% where the minimum qualifying period is met with 2% for each extra year up to a maximum of 70%.

An external valuer values the property. The maximum amount of discount any buyer can receive is £22,000.

Buyers of flats also pay annual service charges and will contribute to any major repairs or improvements carried out to the building.

Repaying the Discount

Where the minimum two year qualifying period applied and you sell within 3 years, the Council may require you to repay a proportion of the discount back with 100% to be paid back if sold in the first year, two thirds in the second year and one third in the 3rd year.

Where the five year qualifying period applied and you sell your home with 5 years of the purchase, the Council may require you to repay a proportion of the discount back with 100% to be paid back if sold in the first year, 80% in the second year, 60% in the 3rd year, 40% in the 4th year and 20% in the fifth year.

The amount of discount to be re-paid will be based upon a percentage of the resale value of the property less the value of any improvements made by the owner since the right to buy was exercised.

The costs of buying your home

Mortgages

Other Ongoing commitments

• Water rates 
• Council tax
• Buildings insurance
• Contents insurance
• Repair and maintenance costs

Getting a survey

Before you decide to purchase your home you should obtain an independent survey from a qualified surveyor or structural engineer or architect.  When you apply for a mortgage the bank or building society will carry out their own survey but this is only for valuation purposes and may not reveal any existing structural problems.

You should have a survey done after you receive your Section 125 Notice.  There are two main types of surveys you can have:

RICS/ISVA Home Buyers' Survey and Valuation

This is a report and valuation in a standardised format to indicate all significant defects, but not minor ones.  This level of survey is normally adequate for most properties, and also gives an indication of the value of the property. 

This type of survey is likely to cost the purchaser around £150.

A Building Survey

This involves a more detailed examination of all the visible parts of the property.  It may be wise to choose this level of survey if your property is old or obviously in need of repair.  It may also be a sensible option if you are considering making any alterations to the building.

This type of survey is likely to cost the purchaser around £450.

Homes designated as defective

Certain types of houses and flats have been designated as defective under Part XVI of the Housing Act 1985, and the Council must tell you of this before you buy if it applies to your home.  Any such property may be difficult to sell at a later date as this makes it difficult to obtain a mortgage.  If your property falls under this category you must think very carefully before buying, and if you do decide to buy it is important to obtain a full structural survey first. 

Other One-off costs

• There are also several one-off costs normally incurred during the initial purchase of a property which are the responsibility of the purchaser:
• A solicitor or licensed conveyancer is needed to look after the legal side of the purchase
• Most banks and building societies charge for arranging a mortgage, and also for the valuation of the property, which they are obliged to carry out.
• Once the sale is complete you must register with the Land Registry as the new owner of the property
• Stamp duty has to be paid on any property purchases costing more than £120,000 – this is 1% of the purchase price.

Further Information

You can obtain further information from the following:

Housing Services Unit, Council Offices, Avenue Road, Seaton Delaval, NE25 0DX

Telephone 01670-542252 

RNID Typetalk service prefix number 18001

Email: Housing Services Unit