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If you are a council or other public sector tenant, you are probably aware that you may have a ‘right to buy’ the property you have been renting. If you have been a tenant in that property for at least three years and you meet the other various criteria, your local council or other authority who own the property, will allow you to buy the property you have been renting for a significant discount. The scheme is designed to assist you in taking that all important first step onto the property ladder.
If you decide to take up your right to buy, it is important to know that should you sell the property within five years, you will be required to pay back the discount you received to the local council you purchased from. The percentage you are required to repay will reduce by one fifth each year following completion of your purchase. For example, if you received a total discount of 50%, if you sell your property within one year of your purchase, you will have to repay the council 50% of the value of your property at the point at which it is sold. If you sell after two years, you will need to pay 40% of the value back to the council, after three years, 30%, and so on.
As the amount repayable is a percentage of the value of the property, you may end up paying back more than the discount you actually received, if the property has increased in value. For example, if your property was worth £100,000 when you bought it through Right to Buy at a 40% discount, you would have benefited from £40,000 discount. However, if you decide to sell the property after one year and the property value has increased to £120,000, you will be required to pay the council 40% of this value, which is £48,000. If you are selling in your second year since purchase, you will repay 80% of 40% of the value of the property (i.e. reduced by one fifth), which would be £38,400, and so on until after five years when no discount is repayable.
You must also be aware that if you decide to sell your property within 10 years of completion of your purchase of the property, you will be required to offer the local council or other authority you purchased from, a right of first refusal to purchase the property back off you. The council may or may not take up the offer, but it is a requirement that they have first opportunity to purchase, before the property is marketed for public sale.
If you would like to know more about right to buy purchases or if you would like assistance with your right to buy transaction, speak to the experts at Emmersons Solicitors contact :
Conveyancing Solicitors Newcastle: 0191 284 6989
Conveyancing Solicitors Sunderland: 0191 567 6667
or email us: firstname.lastname@example.org
Or complete our Online Enquiry Form and select Conveyancing
For most people, buying or selling their own home is the largest single financial transaction that
they deal with during their lives. If you are contemplating a buying or selling your home, and wondering whether you need a solicitor to assist you, then my FREE eGuide To Buying and Seling Your Home will help you to decide.
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