Buying your home
The Right to Buy scheme allows Secure Council Tenants the opportunity to buy their home at a price lower than the market value. This is because the length of time you have spent as a tenant entitles you to a discount. This page describes the Right to Buy scheme as its works today. It is not a substitute for professional advice. It is a summary of the law relating to Right to Buy and it is not intended to be comprehensive.
The circumstances in which the Right to Buy CAN be exercised:
- You may have the Right to Buy if you are a secure tenant and have been for three years.
The circumstances in which the Right to Buy CANNOT be exercised:
- You cannot buy your home if a court makes a possession order, which says you must leave your home. Neither can you buy your home if you are an undischarged bankrupt.
- The Right to Buy cannot be exercised when a tenancy is held on a property which is sheltered housing. Special rules must be met in these cases. 'Sheltered Housing' normally means that the property is one of a group of such dwellings, where a warden service is provided, and that there is a common room nearby.
- You cannot exercise the Right to Buy if it is a condition of employment that you live in the property to be near to your work i.e. Resident Warden/Caretaker
- You cannot exercise the Right to Buy if there is a demolition order on the property.
The exceptions to the Right to Buy set out in schedule 5 of the Act:
You do not have the Right to Buy if your home is particularly suitable for occupation by elderly persons, taking into account its location, size, design, heating system and other features; was let to you or the previous tenant for occupation by a person aged 60 or over, whether they were the tenant or not; and was first let (to you or someone else) before 1 January 1990.
This is in accordance with paragraph 11 of Schedule 5 to the Housing Act 1985. If you are denied on these grounds, then you are able to ask a Residential Property Tribunal to decide if the decision is correct. This request must be made within 56 days after the Landlord has denied your application.
More information on this is available in the section 'Your Right to Buy your Home'
The procedure for claiming the Right to Buy
|Apply to buy|
|Landlord admits your right to buy|
|Landlord sends notice telling you your purchase price and conditions of sale|
|Get A Survey|
|If you disagree with the landlords valuation, ask for a determination by the District Valuer|
|Contact Landlord to either|
|Proceed with Application||Withdraw|
|Get legal advice|
|Ensure rents accounts are clear|
Please print out the completed form and sign it before returning it to the Home Ownership Service. Please read the form carefully and complete as much information as you can. Incomplete/incorrect forms will be returned. Unfortunately we are unable to accept electronic application forms at this time.
More information is available here, this includes guidance on the complete Right to Buy process.
The information supplied on your form will be used to decide whether you have the Right to Buy and how much discount you will get.
If you have any questions when completing the form, please contact Home Ownership Services via email firstname.lastname@example.org
All completed forms should be signed and returned to Home Ownership Services, PO Box 2374, Oldbury, B69 3DE.
Landlord's Response Notice: Once your application has been received, the Council must send a Notice (form RTB2) informing you whether you have the Right to Buy. This Notice must be issued within 4 weeks of the Council receiving the RTB1. If you have been a tenant with Sandwell Council for less than 3 years and have previous tenancies with another Local Authority, the Notice must be issued within 8 weeks. If it is decided that you do not have the Right to Buy your home, the reason will be stated on the Notice.
Valuation: Each property is individually valued and if your application is admitted and the property is a house, you will receive an offer within 8 weeks from the date of the RTB2 Notice.
If the property is a flat or maisonette, a plan of the boundaries is drawn up and a Structural Report is necessary. You will be contacted to arrange a suitable appointment.
The service charge calculation is also necessary.
You will receive an offer within 12 weeks of the date of the RTB2 Notice
Landlord's Offer Notice
The Notice is an important Legal document and will form the basis of the sale of the property to you. You should read it very carefully.
It will tell you five main things:
- It will contain the name(s) of person(s) included in the application and the full address of the property.
- It will contain the price the Council thinks you should pay for it. To calculate this, the Council has the property valued as previously outlined, assesses the Market Value as at the date of your application, and then deducts the discount. If you have made improvements to the property, these will not be included in the market value.
- It will give estimates of service charge and improvement costs expected if the property is a flat or maisonette.
- It will describe any structural defects that are known.
- It will contain terms and conditions which the Council thinks should be attached to the sale.
Calculation of discount entitlement
Discount entitlement is calculated using the number of whole years that you have held a public sector tenancy.
Find out the current maximum discount allowed in money.
Below there are two tables to illustrate the discounts available.
|Discount starts at 35% for 3 years' tenancy. This remains at 35% until you reach 5years' tenancy. After 5 years add 1% for each extra year of tenancy up to 70% or the cash maximum, whichever is lower.
(e.g. 10 years tenancy = 40%, 20 years' = 50%)
|Discount starts at 50% for 3 years' tenancy. This remains at 50% until you reach 5years' tenancy. After 5 years add 2% for each extra year of tenancy up to 70% or the cash maximum, whichever is lower.
(e.g. 10 years tenancy = 60%, 15 years' = 70%)
Taken from 'Right to Buy: A Summary'.
Anti-Money Laundering checks
Once you have received your Offer Notice and have decided you wish to purchase your property, you will need to complete our anti-money laundering process. To comply with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, we are required to see proof of where funds have come from for you to purchase your home. Full instructions and details will be provided with your Offer Notice, but more information on our anti-money laundering process can be found here: https://www.sandwell.gov.uk/amlf_process
The delay notice procedures for tenants and the Council
Most sales go through the process quickly, but sometimes there are problems or delays. If the Council does not send you form RTB2 or the Landlord's Offer Notice within the times mentioned earlier, or the application is held up at a later stage in the process, you may be entitled to a reduction in the purchase price. To get this reduction, you first need to fill in an Initial Notice of Delay (form RTB6) and send it to the Council.
You must give the Council one month to take the next step in the sale process. The Council may send you a Counter Notice if a Response Notice or an Offer Notice has already been served, or there is no action that can be taken by the Council to speed up the sale.
If the Council does not send you a counter notice within the time allowed, you can send the Council an Operative Notice of Delay (form RTB8). The rent you pay during the delay period will be taken off the price of the property at the eventual sale of the property. If the Council delays the sale again, then this procedure can be repeated.
The forms RTB6 and RTB8 can be obtained here.
Section 131 of The Housing Act 1985 (as amended) states the discount shall not reduce the purchase price below the cost incurred by the council in building, purchasing or improving your dwelling. If your property has been recently built, acquired or improved, you may receive a reduced discount or in some cases no discount at all.
If you have received the Landlord's Offer Notice and confirmed to the Council that you wish to proceed further with your purchase and delay the sale, the Council can issue a Notice under Section 140 which asks that you complete the sale within 56 days of the Notice. If you do not, the Council can issue a further Notice under Section 141 which requires you to complete the sale within a further 56 days of the further Notice. If you do not, the application will be withdrawn.
Buying your home is a major financial commitment. Apart from paying for it in either cash or with a mortgage, there will be other one-off costs of buying your home.
- Solicitor: You will need to employ a solicitor or licensed conveyancer to look after the legal side of buying your home. Before employing anyone, always ask how much the advice will cost. Advice will be offered on the suitability of obtaining searches in relation to your home such as a Coal Mining report. The cost of these are varied and depends on the complexity of individual cases.
- Survey: We recommend you have a survey of your home undertaken. These can cost between £250 and £1500, or more if your home has any special problems.
- Arranging a mortgage:If you take out a mortgage loan, you may have to pay for the cost of arranging it and you also have to pay a valuation fee (average cost £1,000).
- Land Registry: When the sale is completed, you must pay the Land Registry to register you as the new owner.The cost of this depends upon the value of the property.
- Stamp Duty: You may have to pay stamp duty, which is a tax that people pay when becoming new homeowners.
Regular payments as an owner of a dwelling
When you purchase your property, you will as a home owner, incur other regular costs in relation to the property which should be considered before you purchase. This will indicate whether you will be able to afford to both finance the actual purchase of the property and then the continued costs of property ownership.
Some of the regular costs as well as the cost of the mortgage loan repayment and mortgage payment protection, are things such as buildings insurance, council tax, water/sewage charges, life assurance, gas, electricity, internal upkeep, external repairs/improvements. This is of course not an exhaustive list.
If the property which you purchase is a flat or maisonette, then it will have been sold to you on a leasehold basis and in addition to the above mentioned, a yearly service charge is also payable. For this type of sale, there may be other significant costs in relation to major works/improvements which may be carried out to the block/building in which your property is situated.
You will no longer be able to receive Housing Benefit.
Please be advised that your home may be at risk of repossession if you fall behind with mortgage repayments.
Once a property is sold to you under the Right to Buy Scheme, the Council does not retain the Deeds to the property. These are issued to the Solicitor who acted in the matter, then if the purchase is financed through a mortgage or loan, the Deeds will be forward to the Lender to be retained until the mortgage or loan is repaid.
If the property is bought outright, then the Deeds will initially be issued to your Solicitor and advice should be given on how best to store securely.
Selling your property
The amount of discount to be repaid if a property is resold within 5 years is now a percentage of the market value of the property when it is resold.
So, if a sale was subject to a 50% discount entitlement, and the property was subsequently resold 18 months later, the discount repayable would be calculated on the current market value and would be 4/5 of 50%.
Example - If the initial valuation was £100,000 with discount of £26,000 this would equal 26%.
If the new value was assessed at £150,000 and you were selling in the second year, the repayable discount would be £150,000 x 26% x 4/5 = £31,200.
Tenants who agree to sell their home to a third party during the discount period must repay some or all of their discount as if they had actually sold their home at the time of the agreement. This is dealt with as a clause in the Deed and is actioned by selling Solicitors at time of resale. Owners who wish to resell their home within 10 years of it having been sold under the Right to Buy must first offer it at market value to their former landlord or to another body prescribed by the Secretary of State.