If you are a secure tenant of a Council, Scottish Homes, certain registered housing associations or a housing management co-operative, you probably have the legal right to buy your home at a discount. The main requirement is that you normally must have spent a total of at least two years as a tenant in publicly provided accommodation and the property you rent must be occupied by you as your only or main home.
What is the right to buy scheme?
The discount rates under the 'Right to Buy' scheme will depend on the type of property you live in and the length of time you have been a public sector tenant. If you live in a house, the discount starts at 32% and goes up 1% a year (after your initial two year period) to 60% after thirty years tenancy. If you live in a flat the starting point is 44% and goes up 2% a year to a maximum of 70% after fifteen years tenancy.
What is the rent to mortgage scheme?
As well as the 'Right to Buy' scheme there is an alternative 'Rent to Mortgage' scheme which allows you to buy your home without paying for it all at once. In this case the price is divided into two lump sums - an initial capital payment (ICP) and a deferred financial commitment (DFC). The ICP is worked out so that if you borrow the money from a bank or building society your weekly outgoings will be 10% less than you pay in rent. The discount rates are slightly less than the 'Right to Buy' scheme and the DFC has to be paid in the future, but generally only when the property is sold or on your death. The 'Rent to Mortgage' scheme is complex but extremely attractive to those who cannot afford to purchase under the 'Right to Buy' scheme.
What are the costs?
You will require a solicitor to look after the legal side of buying your home. At andersonbain we offer an exclusive package for public sector tenants with reduced legal fees. Contact andersonbain & co for a no obligation detailed quotation. As well as the initial costs, you will have to ensure that your home is insured for it's full value against fire, flood etc. There may be other maintenance costs which your solicitor can explain to you. If you are buying a flat, there may be factoring and / or service charges.
Do I have to repay the discount?
Only if you sell the property within three years of accepting your offer of sale. The amount of discount to be repaid would depend upon whether you sold within the first, second or third year of the discount period. It is always wise to check with your solicitor before marketing the property for sale.
How long will it all take?
The whole procedure is designed to avoid unnecessary complications. If all goes smoothly you should become the owner of your home in less than nine months from the date of your application to purchase. If your landlord unreasonably delays you may be entitled to count rent paid towards the purchase price.