How do I buy my council property

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Exchange of keys for right to buy
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How to buy my council property

When looking to buy your council/housing association property it is much easier than you think.

One of our London 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 you have been a tenant for between three and five years, you will receive a 35% discount.  The discount will then rise by 1% each year to a maximum of 70% or £77,900.  In some London boroughs, you can received up to £100,000.

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).

You will need:

If you are intending to secure a mortgage:

  • Your credit scoreA free credit score from Experian will give you an indication of what lenders see about you.  If you do this from the outset, you will be able to assess whether you would potentially be accepted for a mortgage.  If you have an excellent credit score, you are good to go!  If you have a low credit score, click here.
    • An Experian account lets you access your Experian Credit Score for free which is updated every 30 days each time you log in.  Your credit score could make the difference to your chance of getting a mortgage, and Experian believes that everybody should be able to access it without paying a penny.  Buying your first home is an exciting life step and you want to ensure you are in the best position to be qualified for a mortgage. Lenders look at several factors including, your salary, debt and savings when considering your application. Your score is a number from 0-999 that’s based on the information in your credit report.  The higher your score, the greater your chance of getting the best mortgage deals.
    • If you have been rejected a mortgage as a result of a poor credit score, or simply want to improve your score before applying for a mortgage, you can do this by applying for a credit report with Experian (CreditExpert).*
    • *For CreditExpert a monthly fee of £14.99 applies after your free trial. You may cancel during your 30-day free trial without charge. New customers only. Free trial period starts on registration – further ID verification may be required to access full service which may take up to 5 days.
  • Copy of photographic ID (driving licence or passport).
  • Current P60 (if employed).
  • Last two years SA302 tax calculation (if self-employed) from Inland Revenue.
  • Last three months payslips.
  • Last three months bank statements.
  • Monthly expenditure form.
  • A Conveyancing Solicitor

If you do not need to secure a mortgage:

You will need a copy of the following to give to your Conveyancing Solicitor:

Keep a list of the following handy:

  • Any deposit you may have to put towards the purchase.
  • Your earnings.
  • A figure for the costs associated with legal fees from a Conveyancing Solicitor.
  • A figure for any stamp duty to be paid.

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 Surveyor’s 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 advising how much you can purchase the property for.  The offer will have a time limit so your next steps need to be carried out sooner rather than later.
  9. If you need to secure a mortgage, speak to a financial advisor and/or a mortgage advisor (preferably one that searches the “whole of market”).  You do not have to have either of these, but if you want sound advice, these guys will help you make the right decision.  You would need to provide them with your earnings and a monthly expenditure form so that they can work out whether you can afford the repayments of the mortgage.

or

  1. 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.
  2. 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.
  3. If all the figures work out you can either reject or accept the offer on the property in writing to your Local Council.
  4. If you are going ahead with the purchase, contact your Conveyancing Solicitor to commence the legal work on the purchase.
  5. 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 Building 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 Inspection.  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.
  6. If at any time before you exchange contracts you feel this is not right for you, you can always pull out of the purchase.
  7. 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!
  8. Completion date is set, now you should be looking into buildings and contents insurance for your property.
  9. Completion date has arrived!  Keep in contact with your Conveyancing Solicitor throughout the day (if the completion is set for a specific time).
  10. Congratulations on buying your home!
  11. 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.
  12.  You could now look for mortgage life insurance (optional).
  13.  You should now be looking into buildings and contents insurance (if you have not done so already).

For further Government, guidance click here.