What you need to know about Right to Buy Mortgages
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Arranging a mortgage can seem rather daunting. It is important to take your time, get the right advice and feel confident that you are doing the right thing. You should always ask many questions and here we outline the common questions we get asked with some quick straight forward answers.
Do I qualify for the Right to Buy?
You can visit the governments Right to Buy website and complete a simple Quiz to see whether you are eligible for the scheme. There is also lots information about the scheme which you may find helpful on these websites.
How do I apply for the Right to Buy?
You can complete the form (RTB1) online by visiting the Right to Buy website.
How long does the application take?
Once you submit your application, your landlord has up to 4 weeks to respond confirming whether you can buy your home (up to 8 weeks if you have had your current landlord less than 3 years). After that – If you are buying a house the landlord should send you the Offer Notice – called a Section 125 within 8 weeks or if the property is leasehold, i.e. flat, the landlord has up to 12 weeks. This offer notice sets out the property valuation, discount entitlement, price you can buy it for, any structural problems and terms & conditions.
Can I buy the property if I have rent arrears?
If the landlord has taken you to court as you have not paid your rent and has a possession order against you, you will not be able to purchase the property. If you had had some arrears in the past and cleared these you may be able to apply for the Right to Buy Mortgage with Bad Credit however if you need a mortgage you may struggle to find a lender. In this situation you should speak to a mortgage broker for advice.
Can I buy the property if I am bankrupt?
If you have been made bankrupt and have currently not been discharged you will not be able to buy the property. This also applies if you are in an Individual Voluntary Agreement (IVA) or you have a current debt relief order.
How many applicants can go on the RTB application?
Three family members can go on the application providing they have lived with you for over 12 months.
When I sell my Right to buy property – what do I do?
If you decide to sell your RTB home within 10 years of buying it, you have to offer it to either:
- your old landlord, or
- another social landlord in the area
You are able to sell the property at the full market value. If you are unable to agree on a valuation, a district valuer will value the property and confirm the market value price.
Your previous landlord has 8 weeks to confirm if they wish to purchase the property from you. After this date you can sell the property on the open market.
Do I have to pay the discount back?
If you decide to sell the property within 5 years of buying it you will have to pay back all or some of the discount as outlined here:
- 100% of the discount in the first year
- 80% of the discount in the second year
- 60% of the discount in the third year
- 40% of the discount in the fourth year
- 20% of the discount in the fifth year
Please note that the amount that you will need to repay will depend upon the current sale price when sold.
I own other properties, do I have the Right to Buy?
Unfortunately you don’t. This scheme is to help tenants get on to the property ladder and as you already own properties you would not qualify. If you wish to discuss this further you can contact the Right to Buy Agent Service for more information.
How to speak to a mortgage adviser?
At The Money Hub we have a large selection of lenders that can help clients purchase their property using the Right to Buy scheme. You can call us directly or complete the enquiry form and an adviser will give you a call.
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