The Right to Buy your council home

Since 1980, most council tenants have had the Right To Buy their home at a discount from their landlord. In Camden, more than 10,000 households have decided to exercise their Right To Buy since the scheme started.
The following pages contain some basic information about the Right To Buy. They are not a substitute for good quality professional advice. Buying your home is a big step and should not be done lightly.

If you are thinking about exercising your Right To Buy, we will be happy to discuss this with you.

 

Who qualifies?

The Right to Buy exists for secure tenants. If you were a public sector tenant before 18 January 2005, (and you have been a public sector tenant continuously since that time), you do not have the Right To Buy until you have spent at least two years as a public sector tenant. If your tenancy started on or after 18 January 2005, you do not have the Right To Buy until you have spent at least three years as a public sector tenant.
You can only exercise the Right To Buy if the property is your only or principal home.
You can buy jointly with a spouse or civil partner. You can also buy with other members of your family, providing they have been living with you for the past 12 months. You can also buy together with any joint tenants you may have. You can only put four names on the application form.
You cannot buy your home if a court has made a possession order that says you must leave your home or if you are subject to bankruptcy proceedings (or an un-discharged bankrupt).

Some types of property are not eligible for the Right To Buy. You cannot buy your home if you live in sheltered housing or hold a service tenancy. In some circumstances, you might not be able to buy your home if the Council plans to demolish it.
Camden Council owns some of its properties on leases. If there is less than 50 years to run on the lease of your flat (or less than 21 years if you live in a house), you will not have the Right To Buy.

Repayment and Right of refusal

If you are successful in your application and you sell your home within the first five years after buying, you may have to repay some of the discount you received. The amount of discount owed will be based on the change in value of your home since your Right To Buy valuation date.
Additionally, if you applied for the Right To Buy after 17 January 2005, we have the right to buy back your home if you sell it within the first 10 years of your lease.

How to apply

Apply for the Right-to-Buy your council home

In order to apply for the Right To Buy, you need to complete the above application pack. You can also request an application form from leaseholder services.

Once you have completed the form, please return it by recorded delivery or by hand to leaseholder services.

 

Valuations

Once your Right To Buy has been admitted, we will arrange for a valuer to visit your home. Camden employs its own valuers for this purpose. Our valuer will assess the open market value of your property on the date that you applied. They will disregard any improvements that you have made to your home in valuing the property.
Once we have the value of your home we will calculate the purchase price you have to pay and send you a Landlord’s Offer Notice (known as a Section 125 Notice). We will aim to do this within 12 weeks (or eight weeks if you live in a house, rather than a flat).

The price you pay for your home is the open market value minus the discount you are entitled to.

The maximum discount allowed in Camden is currently £103,900. Because our property values are quite high, most applicants are entitled to the full level of discount. If you have previously bought a property under the Right To Buy, any discount previously received will be deducted from your entitlement.

Energy performance certificate

In addition to a valuation survey it will be necessary for an energy performance survey to be carried out at your home. A surveyor will visit your home to asses how energy efficient your home is.

Please note - if you do not give access to the surveyor for the energy performance to be made the Right to Buy offer will be issued without the Energy Performance Certificate.  You are advised that it is beneficial to you to receive the Energy Performance Certificate.  Please keep the appointment agreed with the surveyor.  

Offer Notice

Your Offer Notice is an important document and you should read it carefully. It tells you how much you will have to pay for your home and the terms on which you will buy it. If you live in a flat, we will sell you a lease of that flat for a set period. This period is usually 125 years, but if the Council owns your home on a lease the period might be less.
Your Offer Notice will advise you of any estimated annual service charges that you might have to pay.
We will also tell you about the cost of any major works we are planning on doing over the next five years that you will have to pay a contribution towards. These estimates are binding insofar as we cannot charge you any more than these amounts (other than an allowance for inflation) for works during this period.
We will also advise you of any structural defects that we are aware of. It is important for you to understand that this list of structural defects is not based on a survey of your home and all prospective purchasers are strongly advised to obtain their own survey before purchase. There are different types of survey and you will need to decide which type is best for you.

Please note that the survey arranged by your mortgage provider might not uncover potential structural problems or problems that may relate to electrical wiring etc.

Right to Appeal

If you are unhappy with the purchase price set out in your Notice, you have a right to appeal to the district valuer. The district valuer is independent of the council. If you wish to appeal, you must do so within 12 weeks of us issuing your Offer Notice.
The district valuer’s decision on the value of your home is the one that counts and cannot be appealed, even if this valuation is higher than ours. Once the district valuer has told us his valuation, we will send you a new Offer Notice.
If you are happy with the proposed terms of sale and wish to proceed, you should advise us that you want to accept your offer. This must be done within 12 weeks of us issuing your Offer Notice.
If you don’t respond within the timescale, we will issue you with a Notice giving you 28 days to make your mind up, after which time your application will be closed.

Delays in the process

Most sales go through without any problems, but sometimes delays do occur.
If we do not stick to the timescales or you think we are taking an unreasonable amount of time to complete your purchase, you may be entitled to have some of the rent you have paid in the interim deducted from the price of your home by way of compensation.
If you want to claim compensation in this manner, you must follow the procedure set out in the legislation (what is the legislation, link to be added). If you do not follow this procedure, you will not be entitled to any compensation, no matter how long the delay.

The procedure is activated by serving us with an Initial Notice of Delay (also known as an RTB6). The Notice gives us a time period to put matters right. If we do not do so, you are then entitled to serve an Operative Notice of Delay (also known as an RTB8).
If this form is correctly served, any rent that you pay whilst the delay goes on will be deducted from the purchase price of your home. Please note that the Council expects that you will not owe any rent when you complete your purchase. If you have overpaid your rent it will be refunded once your rent account is officially closed.

Notice to complete

If you tell us you wish to go ahead with your purchase, but you do nothing after that, we will serve you with a Notice to Complete. This Notice gives you 56 days to complete your purchase.
If you are unable to do so by the end of this process, we will serve you with a Second Notice to Complete. Again, this Notice gives you 56 days to complete your purchase. If you are unable to do so by the end of this second period, your application will be closed.

Costs

While the main cost of buying your home will be the purchase price, you will also incur other costs associated with buying a property, more details have been provided below.

Stamp Duty

You may have to pay Stamp Duty, which is a tax that people have to pay when they purchase a property over a certain price. The stamp duty level is set by the government and is subject to change. Your solicitor or financial advisor will be able to advise you of the current stamp duty levels.

Land Registry Fees

When you buy a property your solicitor will need to register your interest in the leasehold or freehold title with the Land Registry (the Government body responsible for recording ownership of land and property). Your solicitor will charge you for this service.

Mortgage

Unless you are going to buy your home with cash you will need a mortgage. Some banks or building societies don’t like giving mortgages on flats in high-rise blocks or in blocks of non-traditional construction, so you might need to shop around for a suitable lender. If you take out a mortgage there will be a number of fees you have to pay in addition to the mortgage loan itself. These may include:

Mortgage Application Fees

If you take out a mortgage your lender may charge you a mortgage application fee, also known as an ‘arrangement fee’.

Valuation fees

When you apply for a mortgage, banks or building societies normally have a valuation survey done. Your bank or building society may charge you a fee for this.

Legal fees

You may need to engage a solicitor or licensed conveyancer to look after the legal side of buying your home. They will transfer the money provided by your lender to the Council as well as ensuring the stamp duty is paid and that your ownership of the property is registered with HM Land Registry. You should always ask how much it will cost you before you employ a solicitor or licensed conveyancer. You may also be required to pay the mortgage company’s legal and associated fees.

Survey Fees

You should consider having a survey done by a qualified surveyor to get advice on the condition of your home before you complete the purchase. There are different types of surveys and you will need to decide which one is best for you. You will have to pay to have a survey carried out.

Ongoing Costs

Apart from the costs you will have to pay when you buy your home, there are a number of other ongoing costs you will need to consider.

Mortgage Repayments

If you take out a mortgage you will be responsible for making repayments to your lender, usually monthly ones. You will have to pay the mortgage, plus interest. Remember your home is at risk if you do not keep up repayments on a mortgage or other loans secured on it.

Building insurance

Building insurance is needed to cover the full cost of rebuilding your home if fire or other incident destroyed it. In the case of flats or maisonettes, we normally arrange building insurance for the whole block. You will be expected to contribute towards the cost of any building insurance. A charge will be included in your annual service bill.

Other Insurances

There are various types of insurance that you should seriously consider. These include Life Insurance that will pay off your mortgage if you die, Contents Insurance to protect the contents of your home from theft and other risks and Mortgage Protection that will meet your mortgage repayments if you loose your job or become ill. However, as with any financial investment, it’s worth getting independent financial advice before making a commitment.

Repairing Your Home

All properties need repairs from time to time. If you become a homeowner, you will become liable for the costs of these repairs. Freeholders of houses will be responsible for all repairs. Leaseholders are responsible for internal decorative repairs and maintenance of services in their flat and for a share of the cost of any works done by their freeholder (usually the Council).

Council Tax/Utilities

You will continue to be responsible for the payment of your Council Tax and for the gas and electricity that you use. In addition to this you will be billed directly by Thames Water Board for water and sewage rates that you pay as part of your rent.

Car space/garage/shed costs

You may pay rent to us for a car space, garage or shed as part of your weekly charges. If you buy your home you will have to continue to pay these to us.

 

Service charges

If you are buying a house, you will be responsible for the costs of all repairs and maintenance, regardless of the condition of the property when you bought it.
If you are buying a flat or maisonette, we will still own the block. We will be responsible for the upkeep of the building, common parts and any of the communal areas and facilities. Under the terms of your lease you will be obliged to pay a reasonable share of the costs of these works and services.
Your lease will set out the services we have to provide, and how your share of the cost (the ‘service charges’) is to be calculated.  There are two different categories of service charge as stated below.

Annual Service Charge

This covers the costs and expenses incurred in connection with the management and maintenance of your block and the Estate and the carrying out of our obligations under the terms of the lease.
It is not possible at the beginning of every financial year to know what it will actually cost to provide all the services to your block or estate.
Therefore, we will send you an initial bill estimating your service charge. The estimate is usually based on the actual costs in earlier years or the budget we have set for the service.
After the end of the financial year we will calculate the actual costs incurred in providing services to your block or estate.
The difference between the estimated costs and actual costs will be calculated. If the actual is more than the estimate you will be invoiced for the difference, and if the actual is less than the estimate it will be applied to your account as a credit.

Note: Some freeholders may also have to pay service charges for the repair and maintenance of shared communal areas on an estate-such as pathways, play areas or gardens. This might also extend to works to your home if you share a continuous roof or other attributes with your neighbours.

Major Works Service Charge

Major works are large items of repair or improvements made to your home or block such as replacing windows and roofs, or installing an entry phone system. We have a financial obligation to charge homeowners a proportion of the costs of any major works we undertake to the common parts of your block or estate.
Blocks of flats can be expensive to maintain and may contain complex equipment, for example, lifts. If the block in which you live undergoes major works the costs which you would have to pay can be very high.

 

Repossession and forfeiture

If you are unable to meet the costs of being a homeowner, you may lose your home.
If you cannot maintain your mortgage payments, your lender may repossess your home and sell it to recover the cost of your loan.
If you breach the terms of your lease - for example, by causing a nuisance or failing to pay service charges - we  may seek to take possession of your home through forfeiture of your lease.  This means that you might lose the property and receive no compensation for the loss.
Both forfeiture and repossession are used as last resorts, but they do happen.