Your Right to Buy Your Home

Guidance for Secure Tenants of East Midlands Housing

This guidance is produce by the Policy & Information section of East Midlands Housing. It gives you more information about buying the home you rent from us. We are required to give you this information by law. It does not mean that you have to buy your home. Please read this guidance in detail and if you have any queries contact your local housing office.

Your rights as a Secure tenant with East Midlands Housing (EMH) may mean you have the Right to Buy (RTB) your EMH home at a discount. Your discount is based on the number of years you have spent as a public sector tenant either with EMH or another landlord such as the Council.

Certain types of homes do not have the Right to Buy, such as temporary accommodation, specialist housing for the elderly, the mentally ill, or disabled; or where your property is provided as part of your employment.

Buying your EMH home

You have the RTB if you have spent at least two years as a public sector tenant and you have a secure tenancy with EMH.

Once you have claimed the Right to Buy, EMH will not usually carry out general maintenance other than that for which it has a statutory obligation, for example, to keep a property wind and watertight, and to adequately maintain services such as heating, sanitary and electrical installations.

Discounts
If you were a secure tenant before 18 January 2005 you will need two years as a public sector tenant in order to qualify for the RTB. The discount available to you after two years is:

32% for houses, plus 1% more discount for each extra full year (up to 60% max)
44% for flats, plus 2% more discount for each extra full year (up to 70% max)
If your secure tenancy started after 18 January 2005 you will need five years as a public sector tenant in order to qualify for the RTB. The discount available to you after five years is:

35% for houses, plus 1% more discount for each extra full year (up to 60% max)
50% for flats, plus 2% more discount for each extra full year (up to 70% max)
But whatever percentage discount you are eligible for it cannot be greater than the maximum discount for the East Midlands area which is £24,000.

If you have previously bought another council or housing association property under the Right to Buy, any discount you got then will usually be deducted from the discount that you get when you buy again.

Help and advice

Contact us if you would like more information on any aspect of the Right to Buy scheme. We don't charge for helping or advising with the Right to Buy.

If you are approached by a person or company offering to help you buy your home, check out what's in it for them and talk to us before signing up to any deal.

It's recommended that you seek independent legal advice about your specific circumstances. You should also get independent financial advice about the different types of mortgages available.

Detailed information on the scheme is available on the Office of the Deputy Prime Minister’s website (www.ODPM.gov.uk) or we can send you a booklet and application form RTB1 with this information if you prefer.

The booklet ''Your Right to Buy Your Home'' is also available in Arabic, Bengali, Chinese (Cantonese), Gujarati, Hindi, Punjabi, Turkish and Urdu.

If you live in a flat we can also send a booklet, "Thinking of Buying a Council Flat" which can also be seen on the ODPM website.

Before you decide to buy your home
The decision to buy a home is probably the biggest financial decision most people will ever make, and it is a decision that should not be taken lightly.  There are a number of important factors that anyone considering buying their own home should take into account. 

These include:

  • Can you afford the mortgage repayments and associated costs of funding your own home?  Remember unlike your rent, your mortgage repayment will not include buildings insurance and a free repairs service – if you buy your home you will have to pay for these things yourself.
  • Are you eligible for Housing Benefit?  Remember, as an owner-occupier you will not receive any housing benefit to help with your mortgage costs. You may be entitled to income support to help with housing costs, but this is not usually paid until nine months after you first claim
  • If you are elderly and own your own home, its value may be taken into account in assessing whether you are eligible for financial help with the cost of residential care.

 

There are also many costs you have to consider when you buy your own home:

One off costs when you initially buy your home include:

  • Legal fees
  • Survey fees
  • Valuation fees
  • Land Registry
  • Stamp duty

 

There may also be other costs

Monthly or Annual costs include:

  • Mortgage repayments
  • Council tax
  • Utility charges - gas, water, electric etc
  • Buildings and contents insurance
  • Life assurance
  • Mortgage protection insurance
  • Internal upkeep
  • External upkeep
  • Service charges (usually flats only)
  • Other costs

 

If you want to buy your flat or maisonette, you will be buying the leasehold from EMH. As a leaseholder you have to pay the landlord a nominal rent (known as a ground rent).  EMH may also make an annual service charge for:

  • communal repairs
  • communal maintenance
  • cleaning of communal areas and the estate
  • ground rent
  • communal lighting charge
  • management charge
  • heating charge (if property is served by a communal boiler)
  • EMH will have an on-going relationship with leaseholders, looking after communal areas, structural repairs and improvements to flats.

 

Remember, if you decide to exercise your Right to Buy you will become responsible for all the costs of maintaining your home, including major structural repairs, routine repairs and improvements to it.

We have produced a chart for you to use to help you decide if you should buy your property. If you would like a copy of this, please contact us.

Making a Right to Buy application

Step 1 - complete and return an RTB1 application form

We use this form to decide whether you have the Right to Buy and how much discount you get. You can get one of these from your local office or by contacting the Customer Service Centre.

Step 2 - we check and acknowledge your application

We will send you a notice (form RTB2) telling you whether you have the Right to Buy. We send you this within four weeks of receiving your application, or within eight weeks if we have to check any previous tenancies if you have been a tenant with EMH for less than two/five years.

If we do not send you this notice within this time, you may be allowed a reduction in the purchase price. To get this reduction, you first need to fill in an initial notice of delay (form RTB6) and send it to us. These forms are available from your local office or by calling the Customer Service Centre.

If you do not have the Right to Buy we will explain why. If you don't agree with this explanation, you can get advice from the Citizen's Advice Bureau or from a solicitor.

If you are still not satisfied, you can write to the Office of the Deputy Prime Minister (ODPM) or the Housing Corporation. Addresses for these organisations are included on the ODPM – Housing website or by contacting us.

Step 3 - offer notice (Section 125 notice)

If we agree to sell you your home we will send you a separate offer notice. This is called a Section 125 notice. This tells you the price you have to pay and the terms and conditions of the sale.

We are allowed up to 12 weeks to issue the offer notice for houses and up to 16 weeks if your property is a flat or maisonette.

If we do not send you the offer notice within the time scale allowed you can serve a delay notice.

The Section 125 notice is an important document and you should read it carefully.

It tells you five main things:

  • It describes the property you have the Right to Buy.
  • It tells you the price we think you should pay for it. We calculate this by working out how much your home was worth at the date you submitted your application form, and then take off your discount. If you have made improvements, these are not allowed to put the price up. If your discount is reduced by the cash limit or the cost floor, the notice must say so.
  • It gives estimates of the service charges or improvement costs you will have to pay if you buy your home. This is usually only if you live in a flat.
  • It describes any structural defects we know about.
  • The terms and conditions we think should be attached to the sale. These may be either a draft of the legal document or part of the notice, or on a separate sheet. Your solicitor will probably want to see these documents.

 

Step 4 - appealing to the District Valuer

If you think the full market price quoted in your Section 125 notice is too high you have the right to request an independent valuation from the District Valuer.

You must write to tell us you have decided to do this within three months of receiving the Section 125 notice. You must state that you want 'a determination of value' under Section 128 of the Housing Act 1985. Then you have four weeks to put your case to the District Valuer who will need to inspect your home.

The District Valuer's valuation will be the one that counts even if it is higher than ours. You will have to accept it or withdraw your application to buy your home.

There is no charge for this service.

Step 5 - other Section 125 questions

If you want to question other things in the notice such as the size of the discount, conditions of sale, your home's boundaries etc. you should contact us. If you disagree with our response you have the right to go to the county court for a ruling. This can be expensive. You should get legal advice first.

If you are buying a flat, you may find the site www.lease-advice.org of interest.

The ODPM also produces two booklets, Thinking of Buying a Council Flat, and Residential Long Leaseholders. These may be of interest to you and are available on request from us or from the ODPM website.

Step 6 - getting a survey

Before you finally decide to buy you should get an independent survey from a qualified surveyor. Your bank or building society will have a survey done when you apply for a mortgage but this is only to value your home. It may not uncover structural problems and you may want to pay for a more detailed survey.

Step 7 - getting legal advice

Before you decide to buy you should get legal advice. If you don't know a solicitor or a licensed conveyancer your bank or building society may have a list. You should always ask how much advice will cost before employing a solicitor or a licensed conveyancer.

Step 8 - telling us what you want to do next

You now have a choice to make. You now must decide if you want to –

buy your home outright for the full Right to Buy price, less any discount you are entitled to;
or

not buy, withdraw your application and carry on paying rent.
If you are proceeding with your purchase you should write to advise us within 12 weeks of getting your S125 notice. If you decide on a redetermination of value (by the District Valuer) again you should write to us within 12 weeks of getting the offer notice.

If you do not let us know your decision within 12 weeks we will send you a reminder. If you do not reply within 28 days we will assume you don't want to buy and will not take your application any further. If you're not able to decide within the time limit you can ask us to wait a bit longer for your reply. If you're unable to decide for a good reason, such as you were in hospital, you should tell us and your time limit can be extended. If you are proceeding we cannot send the next reminder within 12 months of the offer notice. This is called a section 140 notice.

You can still change your mind at this stage. You don't have to buy your home because you told us you want to. If you don't tell us what you want to do, we assume you don't want to buy and will cancel your application. You will have to start again and if the value of your home has gone up in the meantime you will have to pay the higher price.

If you apply for RTB after 18 January 2005 we can send the section 140 notice three months after the offer notice.

Step 9 - finding a mortgage

You should talk to a bank or building society if you need a mortgage. They may charge for arranging a mortgage and also for the mortgage valuation survey.

Other useful contacts for mortgage information are the Financial Services Authority and the Council of Mortgage Lenders. Find our more on their websites www.fsa.gov.uk and www.cml.org.uk.

Step 10 - completing the purchase

If you're happy with our terms and have arranged to raise the money you are ready to go ahead and buy. Let us know and ask your solicitor for advice on the legal documents and making your payment. It should be a matter of weeks to become the home owner if there are no unforeseen problems.

You can take all the time you reasonably need to get a mortgage or legal advice. You can also take your time to agree the terms of the sale with us.

However, if we don't hear from you for a long time you may get a warning notice (S140). This will ask you to either complete the purchase within eight weeks or to write and tell us that you disagree with the terms of the sale. If you don't reply we will send you a second notice (S141) asking you to complete the purchase. If you don't complete or respond to this final notice your application is cancelled.

If you applied before 18 January 2005 we will not send you a warning notice until at least 12 months after your Section 125 notice. It's best if you or your solicitor let us know throughout the process how you are progressing with raising the money or any other issues that may delay the purchase.

If you apply for RTB after 18 January 2005 we can send a reminder notice (S140) three months after the offer notice.

Reselling your home after buying under Right to Buy

You can sell your home whenever you like but you may have to pay back some of the discount you received when you bought the property.

If you applied for RTB before 18 January 2005, and sell within three years of buying it, you will have to repay some or all of the discount that you received. If you sell:

during the first year, all of the discount must be repaid
during the second year, two thirds must be repaid
during the third year, one third must be repaid
After three years you can sell without repaying any discount.
If you apply for RTB on or after 18 January 2005, and sell within five years of buying it, you will have to repay some or all of the discount that you received. If you sell:

during the first year, all of the discount must be repaid
during the second year, four fifths must be repaid
during the third year, three fifths must be repaid
during the fourth year, two fifths must be repaid
during the fifth year, one fifth must be repaid
The repayment of discount will be a percentage of the market value of the property when it is resold within the first five years of purchase. After five years you can sell without having to repay any discount.

Right of first refusal
If you buy your home under the RTB scheme on or after 18 January 2005 and you want to sell it within 10 years you will have to offer it, at full market value, to either :

your former landlord, or
to another social landlord in your area
The market value must be agreed between the parties. If they cannot agree it will be decided by the District Valuer.

If your offer has not been accepted within 8 weeks you will be free to sell your home on the open market.

Also, from 18 January 2005, entering into a deferred resale agreement triggers the repayment of discount at the time that the agreement is entered into (not the time that the ownership of the property is transferred). This means that if you agree to sell the property to someone after the first three of five year period, you will still have to pay part or all of the discount back.

If you would like more information, an application form and booklet on the Right to Buy your Home, please contact your local office.