How do I buy my council property?

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Exchange of keys for right to buy
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When looking to buy your council/housing association property it is much easier than you think.

One of our members has recently been offered an amazing discount on her home valued by her local authority at £320,000.  She was then given an offer to purchase the property for £220,000.  Our member did not require a deposit either as some lenders will lend without one.

Discounts vary depending on how long you have been a council tenant or housing association tenant.  If you sell the property within 5 years you may need to repay the discount back.

If your home was transferred from your local council to a housing association whilst you were living there, you may have a preserved right to buy.  In effect you may still be able to buy your home in the same way as the right to buy scheme.  To see if you are eligible click here.

The discount is based on:

  • The value of the property.
  • The type of property you are purchasing.
  • How long you have been in the system (council or housing association tenant).

Before you do anything else, you MUST get a copy of your credit report.

  1. Once you have the report, check whether there are any errors about any of your borrowing.  You may have previously had a loan and paid it off and it does not show on the report.  If this is the case, you MUST write to the credit company to let them know the change of circumstances.
  2. This report will also contain a list everyone in your current home who may have taken out any borrowing including loans and credit cards.  If they have defaulted on payments or have heavy borrowing, this WILL effect your chances of getting a mortgage.
  3. Once you get the report, you may need to write back to the credit report company to financially disassociate yourself from each family member.
  4. To do this, write the following letter:

Dear Sir/Madam,

I enclose a copy of my credit report.

I write to confirm that I am not financially associated with:

[list each family member on the report]

Can you please update my credit report accordingly.

Yours sincerely/faithfully

[Your name/Address etc.]

The company will then remove those listed on the report and this should then improve your credit score.

If you do not do this, it could impact your chances of getting a mortgage and delay the process of applying for a mortgage unnecessarily.  Most people are not aware of this.

Get your documentation in order:

  • Copy of photographic ID (driving licence or passport).
  • Current P60 (if employed).
  • Last two years SA302 (if self employed) from Inland Revenue.
  • Copy of your tax declaration (if self employed) from Inland Revenue.
  • Last three months pay slips.
  • Last three months bank statements.
  • Monthly expenditure form.

Keep a list of the following handy:

  • How much deposit you have (this may not be required by some lenders).
  • Your earnings.
  • A copy of your credit report (for guidance about a credit report click here).  If you do not have a good credit score, click here).
  • A figure for the costs associated with legal fees from a conveyancing Solicitor.
  • A figure for Stamp Duty to be paid.

If you are considering buying the property follow this guide:

  1. Click here to download an application form.
  2. Once you have filled it out, send it to your local council.
  3. You will then receive a letter requesting a date and time for a surveyor to come to view the property to make an assessment of its condition and structure.
  4. You will then receive a further letter enclosing the surveyors report.
  5. Check this very carefully.  The report will detail how many bedrooms, outbuildings (if any) and the condition of the property.
  6. If the information is correct, sign it along with any other persons listed in the application and send it back to your local council.
  7. If the information is incorrect, send it back to your local council with the amendments.  You may find that they will send a surveyor back to your property to check that the amendments are correct.
  8. You will then receive an offer letter.  The offer will have a time limit so your next steps need to be carried out sooner rather than later.
  9. Speak to a financial advisor and/or a mortgage advisor (preferably one that doesn’t charge you a fee and searches the “whole of market”) for a mortgage.  You don’t have to have either of these, but if you want sound advice and you do not feel confident with the process involved in buying your home, these guys will help you make the right decision.  You will need to give them your monthly expenditure form so that they can work out whether you can afford the repayments of the mortgage.
  10. or
  11. Contact the mortgage department of your bank.  Tell them you are looking to buy a property.  They should be more than happy to give you guidance (but remember, you do not have to have your mortgage with them). You will need to give them your monthly expenditure form so that they can work out whether you can afford the repayments of the mortgage.
  12. If you would like building works to be carried out, now would be a good time to contact a builder to get an idea of much this would cost.  Give these costs to your financial advisor/mortgage advisor or your bank to add to your potential monthly expenditure.
  13. If all the figures work out accept the offer on the property in writing to your local council.
  14. Most people will now engage the services a building surveyor who will view the property to provide you with a Building Survey/Home Buyers report.  The report will confirm the value of the property and will pick up things like problems with electrics or whether the property will need a new roof etc.  Once you have had a survey carried out, you can ask your local council to reduce the price if any issues arise.  This is an invaluable asset when buying any property and worth spending the money on.  If further issues are raised in this report and the property requires further investigation, you will then need to engage the services of a Structural Engineer.  The engineer will then provide you with a Building Inspection Report/Full Survey/Structural Survey.  Again you will be able to negotiate the price of the property you are purchasing with this report if it does indeed require more work.  If all issues are resolved you are ready to move to exchange of contracts.
  15. If at any time before you exchange contracts you feel this is not right for you, you can always pull out of the purchase.
  16. You should now be in a position to set an exchange of contracts and completion date.  Some people decide to exchange and complete on the same day and this is possible to request.  Once you have exchanged contracts you are officially committed to the purchase of your home!
  17. Completion date is set, now you should be looking into buildings and contents insurance for your property.
  18. Completion date has arrived!  Keep in contact with your solicitor throughout the day (if the completion is set for a specific time).
  19. Congratulations on buying your home!
  20. Your solicitor will register the property with the Land Registry for properties in England and Wales and you will receive the title deeds to your new home.  Your solicitor will arrange for the payment of Stamp Duty.
  21.  You could now look for mortgage life insurance (optional).
  22.  You should now be looking into buildings and contents insurance (if you have not done so already).

For further Government guidance click here.