Do Councils Buy Back Council Houses?
This article aims to answer the question of whether or not council authorities will buy back ex-council houses that were purchased by private owners or former tenants. For a deeper understanding of the topic, we will also discuss the details of how to sell an ex-council house back to the authorities as well as analyse whether or not it will be a profitable transaction.
Do Councils Buy Back Council Houses?
Yes, councils do buy back council houses and have continued to do so, especially in times of high demand for social housing. However, they are not under any obligation to buy back council houses that have been sold to previous council tenants earlier.
This means that while it is common practice for local councils to buy back ex-council property when a former council house is offered to council authorities, they have a choice to make whether or not they would buy it back.
That said, whether or not you are sure if the council authorities will buy back your ex-council house, you must offer it to them first when you intend to sell your property as they have the first right of refusal before an ex-council property is listed for sale in the real estate market.
Should the council be interested in buying back an ex-council house, the authorities will conduct an independent valuation of the property and the entire process will be managed by their legal team. Once their valuation process is complete, councils will make an offer to the property owner based on the current market value of their ex-council house.
On the other hand, councils have the first right of refusal when an ex-council property is to be listed for sale and can easily reject your offer when you apply for a sale. Their decision to make the purchase will essentially depend on the current demand and supply of social housing facilities in their district.
Therefore, if you are the owner of an ex-council property and have bought it under the Right to Buy scheme, you are required to first check with your local council office if they would be interested in buying it back from you before you place your property in the open market for sale.
How Do You Offer The Council To Buy Back A Council House?
When you intend to make an offer to local council authorities to buy back your ex-council house, you need to contact the Leasehold Team at your local council office and provide them with the following information as you make a formal application to sell your ex-council house back to the authorities:
- details of the property regarding whether it is a house, flat or maisonette
- the number of bedrooms
- the type of heating system installed
- details of any improvements or structural changes made to it
- an estimated market valuation of the property (if you have one)
You must provide a return address along with your application so that the council authorities can revert with their response.
It usually takes them around 8 weeks to share their feedback. If you do not hear from them after this timeframe, you are free to place your property in the open market for sale.
Does Selling A Council House Back To The Council Affect Your Original Discount?
Yes, when you sell a council house back to the council, the original discount that you availed during the purchase will be affected. However, this discount is only affected if you have lived in the property for a shorter period.
If you intend to sell your council house after purchasing it, you may not be able to do so without foregoing the discount you availed through the Right To Buy scheme until you’ve lived in the property for a minimum of 5 years after the purchase.
This means that if you sell the property within the first year of purchasing it from the local council authorities or a social housing landlord, you will have to repay the entire amount of the discount that you availed during the purchase.
As the number of years of your stay in the property increases, the repayment amount of the discount decreases from 80% after the completion of the first year to 20% after the fourth year. Below is a detailed breakdown of the discount that sellers have to forego:
|Year 1||100% of the discount|
|Year 2||80% of the discount|
|Year 3||60% of the discount|
|Year 4||40% of the discount|
|Year 5||20% of the discount|
Is It Profitable To Sell A Council House Back To The Council?
Whether or not it is profitable to sell a council house back to the council will essentially depend on two factors:
- if there are improvements made to the original structure
- the number of years that have passed since the council property was purchased
However, if it has been more than 5 years since you purchased a council house, you can expect to make a considerable profit when you sell it back to the council.
On the other hand council housing tenants who purchased council property when the Right to Buy scheme was initially introduced in the 1980s and 1990s have benefited most from an increase in the value of an ex-council property when they sold it in the open market.
For instance, a group of council tenants purchased the flats that they were living in at Clarendon Place, Westminster. Some of the three-bed flats that were once owned by the local council were sold by ex-council tenants for prices between £1.8 million and £2.25 million to private owners.
The above discussion brings us to the conclusion that council authorities do buy back ex-council houses. At the same time, their decision to make a purchase is entirely based on their will as well as budget to buy back the property and they are under no obligation to purchase it. On the other hand, owners of ex-council property are required to check with their council office regarding their intent to purchase if they sell their property within ten years of purchasing it.