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  • FIRST POST
    • lazynooblet
    • By lazynooblet 17th Jun 17, 9:42 PM
    • 3Posts
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    lazynooblet
    Council Right-to-Buy - House is brand new
    • #1
    • 17th Jun 17, 9:42 PM
    Council Right-to-Buy - House is brand new 17th Jun 17 at 9:42 PM
    We are currently in discussions with another family to swap homes. Their house is 7 months old and is council owned. We have lived in social housing through a housing association for 22 years.

    By moving into a council home we would be eligible to RtB the council home immediately.

    However, the house is so new! Surely the council would out-right deny any attempt to RtB a house that was only just built? I'm only interested in moving if RtB was on the cards. We could potentially buy the house we are in (and we are happy with it) when/if they extend RtB to housing associations.

    So, question is: Does the age of the home get considered when looking at eligibility for Right-to-Buy?
Page 1
    • glosoli
    • By glosoli 18th Jun 17, 3:37 AM
    • 630 Posts
    • 362 Thanks
    glosoli
    • #2
    • 18th Jun 17, 3:37 AM
    • #2
    • 18th Jun 17, 3:37 AM
    You should really ask the council directly for a proper answer on it.
    • da_rule
    • By da_rule 18th Jun 17, 8:52 AM
    • 2,490 Posts
    • 2,223 Thanks
    da_rule
    • #3
    • 18th Jun 17, 8:52 AM
    • #3
    • 18th Jun 17, 8:52 AM
    Under the Housing Act and the relevant accompanying statutory instruments, there is something which is known as the 'Cost Floor'. This means that, for a period of 15 years after the property was built the authority (or housing association) can recover the costs of building the property, acquiring the plot and doing any site development works.

    If that value is higher than the sale price (the price you'll pay for the property after discount) but lower than the market value (the value before discount) then your discount will be reduced accordingly. So, assuming the following figures as an easy example:
    Market Value = £150,000
    Discount = £40,000
    Sale Price = £110,000
    If the build costs etc (the cost floor) were £125,000 the authority would deduct £15,000 (being the difference between the sale price and the cost floor) from your discount meaning your final discount would be £25,000 and the final sale price would be £125,000.

    If the costs exceed the current open market value of the property then you will receive no discount and pay the open market value. So, if the property is worth £100,000 and the costs of building it etc were £125,000 you would pay £100,000 regardless of how much discount you could get.

    So, to answer your question, the Council cannot refuse your application just because the house is new (unless it has been specially adapted for disabled use or one of the other exemptions in the Act). But, they can recover their costs in developing and building the house up to the current market value. So you can still exercise your Right to Buy, you just won't necessarily receive much of a discount, if any at all.
    Last edited by da_rule; 18-06-2017 at 8:57 AM.
    • lazynooblet
    • By lazynooblet 18th Jun 17, 11:56 AM
    • 3 Posts
    • 1 Thanks
    lazynooblet
    • #4
    • 18th Jun 17, 11:56 AM
    • #4
    • 18th Jun 17, 11:56 AM
    @da_rule -- this explanation is perfect, thank you very much.
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