RIGHT
TO BUY - Right To Buy Mortgages
RIGHT TO BUY MORTGAGE - RIGHT TO BUY COUNCIL HOME
The Right to buy scheme is a policy
in the United Kingdom which gives tenants of council housing the right
to buy the home they are living in. Currently there is also
a right to acquire for the tenants of housing associations.
Individual local authorities have always had the ability
to sell council houses to their tenants,
but until the early 1970s such sales were extremely rare. However,
the Conservative-controlled Greater London Council of the late 1960s
was persuaded by Horace Cutler, its Chair of Housing, to create a general
sales scheme. Cutler disagreed with the concept of local authorities
as providers of housing and supported a free market approach. GLC housing
sales were not allowed during the Labour administration of the mid-1970s
but picked up again once Cutler became Leader in 1977. They proved
extremely popular, and Cutler was close to Margaret Thatcher (a London
MP) who made the right to buy council housing a Conservative Party
policy nationally.
After Mrs Thatcher became Prime Minister, the legislation
to implement the Right to Buy was passed in the Housing Act 1980. The
sale price of a council house was based on its market valuation but
also included a discount to reflect the rents paid by tenants and also
to encourage take-up. The legislation gave council tenants the right
to buy their council house at a discounted value, depending on how
long they had been living in the house, with the proviso that if they
sold their house before a minimum period had expired they would have
to pay back a proportion of the discount. The sales were an attractive
deal for tenants and hundreds of thousands of homes were sold. The
policy is regarded as one of the major points of Thatcherism.
Proceeds of the sales were paid to the local authorities,
but they were restricted to spending the money to reduce their debt
until it was cleared, rather than being able to spend it on building
more homes. The effect was to reduce the council housing stock, especially
in areas where property prices were high such as London and the south-east
of England.
The Labour Party was initially against the sales and
pledged to oppose them in the 1983 election but dropped this policy
because it was perceived as losing votes. Since 1997 the Labour government
has reduced the discount available to tenants in local authorities
which have severe pressure on their housing stock; this includes almost
the whole of London.
The Right to Buy rules were
changed in 2005. Five years' tenancy is now required for new tenants
to qualify, and properties purchased after October 2004 can no longer
immediately be placed on the open market should the owner decide to
sell. Such owners must now approach their previous landlord (Registered
Social Landlords RSLs) and offer them 'first right of refusal' if the
RSL is unable to offer a realistic purchase price then that landlord
still has the right to offer the property to an alternative
RSL. All RSL's are now legally obligated to offer Right
to Buy advice including advice on high fee-charging Mortgage
Brokers. The time in which Right to Buy conveyancing should
take place has been reduced from 12 months to 3 months. The Financial
Services Authority now governs and regulates most types of mortgage-selling.
RIGHT TO BUY ENQUIRE TODAY
Regency Mortgage Corporation Limited
is a UK market leader in finding mortgages for Council and Housing
Association tenants, having served thousands of customers over the
last 10 years.
Regency’s professional and
experienced staff will guide you through the whole process of buying
your Council House.
- Applying to your Council for your Right
to Buy
- Advising you on your mortgage options
- Finding a solicitor for your legal work
- Completing your mortgage with your lender
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