Buying a council property

pantone

Having been council tenants for several years now my partner and myself are considering purchasing the property.

We have made several modifications and improvements to the building (with the consent of the council) and have decided that the time is right to buy rather than rent. Can anyone shed any light on our situation? There seem to be several companies offering a “right to buy” service – does anyone have any experience of these companies?

Both my partner and myself are working and are around 40 years old

Thank you in advance
PANTONE

scouselass

Hello, your local council will be able to provide a booklet, 'Right to Buy' and it is small but invaluable, it really does cover most things you will need to know. Also at this early stage you don't really need to consult, or pay anyone anything. The RTB process can take up to a year with some Council's so get the ball rolling, as you can opt out at any point without any obligation or cost to yourself.

Once you register your interest to buy with the council, I think by completing a RTB1, they will organise a valuation of the property, they pay not you.

Importantly make a written record of all the improvements you have made and make sure the council get a copy of this document as these must not be taken into consideration when valuing the property. In fact it is also useful to personally hand a copy of this document to the valuer who will be visiting your property to ensure he gets to see, sometimes councils can be inefficient. Remember anything you have done which reflects the property more positively write it down.

You will be then be sent a copy of the report and the council's offer letter showing the discount you will receive if you wish to proceed. You can challenge their valuation if you think it is too high.

With a RTB you probably will not need a deposit if you are borrowing below the value of the property. Some lenders won't give mortgages on RTB properties, but there are lots that do, so just shop around. Also check if there is a solicitor in your area who specialises in RTB conveyancing as sometimes they do a set fee as it can be a straightforward process if the Landlord is the City Council, but for some reason it is less straightforward if it is a social landlord.

The best advice is to get the ball rolling asap, as you can opt out at any time - and the valuation will be dated from the date you apply, and as house prices continue to rise this is better done sooner rather than later. Good Luck.

Beware: just because you are doing RTB it is not complex, so don't be kidded into thinking you need to pay for specialist mortgage advice. Get that booklet and you will see how simple it can be, or if you are stumped take it to your local CAB and they will explain the process.

Mortgage_Master

Great advice form scouselass.

Beware: just because you are doing RTB it is not complex, so don't be kidded into thinking you need to pay for specialist mortgage advice. Get that booklet and you will see how simple it can be, or if you are stumped take it to your local CAB and they will explain the process.

Too true!!! RTB is mainstream business! Here's a list of lenders to help you on your way. (there are others)

Abbey
A&L
Bank of Scotland
Barnsley BS
Bath BS
Chelsea BS
C&G
Coventry BS
First National
GMAC
Halifax
Lambeth BS
Leeds & Holbeck
Marsden BS
Natwest
Nationwide
Newbury BS
Northern Rock
Norwich & Peterborough BS
Nottingham BS
RBS
Scarborough BS
Skipton BS
West Brom
Woolwich
Yorkshire BS

zMoney

PLEASE PLEASE PLEASE, do not use any specialist RTB companies.

The process is neither complex or special, any normal solicitor will be able to do this, and pop into any financial advisor and get your advice for free.

The procedure goes as follows :-

1. Get form RTB1 by either writing to your local council or downloading it from your local councils web site. (If you can't find it on their web site, I'll post a link)

2. The council now have 4 weeks to acknowledge your right to buy (8 weeks if you have been a tenant for less than 2 years)

3. The council will then acknowlege you Right-To-Buy on form RTB2 which will be sent to you giving the date that the purchase price will be set from.

4. The council now have 8 weeks from that date to fix a price on your property, 12 weeks if you live in a leasehold flat/building.

5. In this 8 week period, the council usually send round a council estate officer, really just to check you live there (not that they tell you that) and make sure everything is ok.

6. Also a surveyor will call. This is the time to tell him of any improvements that you have done to the property since you moved in. He will take a notice of this and all the things you mention, write them down as well, because you can check this on the offer letter the council with send giving you the price to buy.

7. Hopefully within the 8 weeks or 12 weeks for leasehold properties you will receive a 'Section 125 Notice' stating the price the surveyor place on the property at the time you put in your RTB1 form. On this forn you will also see the discount the council have given you, as well as the list of improvements you told the surveyor about.

8. Now is the time to contact a financial advisor to arrange a mortgage. When the mortgage is arranged, then take the letter to a solicitor to start the buying process.

9. From the time you receive the 'Section 125 Notice' with the price on it, you have 12 weeks to let the council know what you want to do, but use this time to arrange the mortgage and start the buying process. This time is not fixed and if you have good reason, can be extended further if you contact the local council.

10. Wheels move very slowly when your dealing with the council, mainly due to the massive amount of people taking up the right to buy offer.

11. I had my mortage arrange on the day the offer letter arrived, but it still took 4 months to finally complete.

******* WHAT TO DO  IF ???? ******

1. No offer letter within 8 weeks of me getting my RTB2 form and the surveyor coming.

* If you have heard nothing within 6-7 weeks of receiving your RTB2 form, contact the council or download Form RTB6 (Initial Notice Of Delay).
* At 8 weeks, fill in and return this form. This puts the council on notice they have taken too long to deal with your application.
* The council have now 1 month to issue you with a Response Notice - 'Telling you the legal reason for the delay (we're very busy, is not one) or why you are not eligible' or more likey the council will issue you with a 'Section 125 Notice'. - Then proceed from section 9 above.
* If after 1 month you have neither, then get Form RTB8 (Operative Notice Of Delay) and sent this to the council.
* After this notice is issued, The rent you pay while the delay goes on will be taken off the price you have to pay for your home. (Believe me you are 99.9% not going to get to this stage)


2. I've got my 'Section125 Notice' with the surveyors value on it, and this is far too high for my or similar properties in my street.

*Within 3 months of getting the notice, you must write to the council and ask for a 'determination of value' under section 128 of the Housing Act 1985. You then have 4 weeks to pit your case to the district valuer, who will inspect you home.
*Be very careful before doing this, as the District Valuers decision is final. So if he says £200,000 and the council said £190,000, you are bound by his decision and can't fall back on the councils value. Your only option then would be to cancel the application and reapply, and seeing that up to now the application hasn't cost you anything, why not.


**** SPECIAL NOTICE - Re. Mortgage ****

When arranging a mortgage, you can raise extra money for home improvements via a secured loan on your property. This can be done at the same time you arrange your mortgage. It involves a second charge on your propery, which the council normally charge an admin fee for, typically £50. This is because the lenders charge must take precident over the councils. (Basically the pecking order of who gets first claim on your property if it is repossed.)

You can't secure any other loan on your propery dueing the discount period (3years), except for home improvements covered above.

Well I hope that makes sense, because I am very very tired.

So, PLEASE PLEASE PLEASE do not pay any so called specialist right to buy firms.

pantone

Thank you all for your replies which were both informative and helpfull

PANTONE

Paul_Varjak

I think the rules governing ‘Right to Buy’ vary a little between England, Scotland and Wales. The maximum discount payable also depends on several factors such as how long you have been in public sector housing and whether you are buying a flat, maisonette or house. I suggest that you visit your Council’s website to find out more.

You also need to consider how long you intend to stay in your home once you have bought it. If you sell to soon you may have to pay some or the entire discount back to the Council.

The other thing you will need to consider is whether you are buying the leasehold or the freehold. If you live in a house you will probably be purchasing the freehold.

But if you are in a flat or maisonette it will probably be the leasehold. In that case you may have to pay the council maintenance charges for the structure and communal areas. And if the Council does some major works you may find yourself lumbered with a very large bill!

And, remember, you will be responsible for the repair of your own home whether it is freehold or leasehold, you will not qualify for housing benefit and if you later need residential care the Council will take the value of your home into account.

For more information on mortgages contact the Financial Services Authority (FSA) on 0845 606 1234.

Paul_Varjak

For the full information on the rules applicable to RIGHT TO BUY click on the link below for the Office of the Deputy Prime Minister:

http://www.odpm.gov.uk/stellent/groups/odpm_housing/documents/page/odpm_house_024003-01.hcsp

pantone

Cheers Paul,

I am acting on all information received

Regards,

PANTONE