Buying a home in the United Kingdom has never been more expensive. Affordable finance options are readily available, but the average UK property price has skyrocketed over the past 20 years.
Thousands of council tenants across England, however, are finding themselves able to potentially capitalise on a highly profitable opportunity. Those who qualify under the Right to Buy scheme may be able to purchase their properties for as much as £82,800 (increasing to £110,500) less than their official market value.
These kinds of enormous discounts have made property ownership more affordable for buyers than ever before. Nevertheless, there are some council tenants who continue to be daunted by the prospect of purchasing their home, even under the Right to Buy scheme. They believe it to be risky and complex, but the process for the buyer is actually quite straightforward and similar to any property purchase.
The four common misconceptions that stand in the way of prospective council property buyers are:
Misconception 1: “It’s too complicated!”
From the buyer’s point of view, it’s actually very similar to any property purchase. All that is needed is to establish your eligibility and then formally indicate your intention to purchase the property.
If you’ve lived in a council house for more than three years and you intend to purchase the house as your primary or only residence, it’s highly likely that you will qualify for a discount. If you’re happy with the purchase price after the discount is applied, then the process is the same as that of any other property purchase and, in fact, in some ways, more straightforward as the seller is less likely to pull out of the sale.
Misconception 2: “Right to buy is only for first-time buyers”
The truth is that there are few restrictions within the Right to Buy scheme in terms of previous homeownership. Again, just as long as you intend to use the property as your primary or only residence, it’s irrelevant how many homes you’ve owned in the past. The Right to Buy scheme is open to all qualifying council tenants across the board. Eligibility is measured by the length of the tenancy, the nature of the property, and so on. As such, you do not have to be a first-time buyer to qualify for a sizeable discount under the Right to Buy scheme in England.
Misconception 3: “The right to buy is only for low-income households.”
It’s surprising how many people think they would not be eligible for a Right to Buy discount on the basis of their earnings. While various schemes and incentives have been introduced over the years for low-income households, Right to Buy isn’t one of them. It’s worth remembering that some council homes in more prestigious locations across England have exceptionally high values. In this case, even a substantial discount wouldn’t eliminate the need for a large mortgage. Your income level will only affect your eligibility for the mortgage to purchase your home, not your eligibility for a discount.
Misconception 4: “I won’t be allowed to sell or let my property in the future.”
Some purchasers have naturally turned to the right to buy as a way to make money. Contrary to popular belief, those who qualify for Right to Buy discounts are perfectly entitled to sell or let their properties go from the moment they take ownership of them; however, if you sell your home during the first 5 years of purchase, you will be expected to repay some or all of the discount that you were granted.
If you are interested in the Right to Buy scheme or have any questions regarding secured loans or mortgages for home purchases, we would be delighted to hear from you. Book your obligation-free consultation with UK Property Finance today. Work out the costs of a mortgage using our UK mortgage calculator.