With an increasingly high percentage of council housing tenants purchasing and then renting out their council property, there are major concerns with regards to the very purpose of council housing facilities being in conflict with such actions. Council houses were introduced in the UK around 1919 with the aim to provide low rent and low costs of ownership to those individuals who may be low on incomes or savings. Today, there are nearly five million council housing tenants benefiting from the facility.
How Long After Buying A Council House Can You Rent It Out?
You can rent out your council house immediately after buying the property as there is no legal restriction on renting the place out once the process of transfer of ownership and other legal documentation is complete. In fact, according to some estimates, nearly 40 per cent of council property is rented out after it has been bought by tenants.
Your local council may charge a one-time subletting fee which can be discussed with their legal team once you’ve made your decision to rent out the property and informed the council authorities.
However, 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. Similarly, as the number of years of your stay in the property increases, the repayment amount of the discount decreases from 80 per cent after the completion of the first year to 20 per cent after the fourth year. Once you complete five years on the premises, you will not have to repay any amount from the Right To Buy discount.
According to this article that appeared in The Guardian social housing tenants can expect a hike in their rental bills of around 4.1 per cent by April 2022. This rise in rental bills, coupled with an inflation rate of 6 per cent may add to the current pressure faced by many individuals. The same article suggested that with social renters already paying nearly 19 per cent of their income (including benefits) to cover the expense of rent, increasing rental bills will not only have an impact on their living conditions but may also discourage purchases of fixed assets (including property).
To learn more about the topic, we will explore the following areas:
- Can I Buy My Council House For Cash?
- How Can I Buy My Council House?
- What Is The Right To Buy Scheme?
- How Can I Apply For Right To Buy?
- Can I Get A Discount On Purchasing A Council House?
Can I Buy My Council House For Cash?
Yes, you can buy your council house for cash. In fact, it is the buyer’s choice to decide whether they choose to purchase their council house with cash or through a mortgage.
One of the most common ways to purchase council property is the Right To Buy Scheme. Under this, council houses can be purchased by local council tenants by fulfiling the following conditions:
- The council house is the applicant’s main home
- The property is self-contained
- The applicant is a secure tenant
- The applicant has had a public sector landlord for at least five years
However, the Right To Buy Scheme only allows council tenants to purchase the property that they are living in and not any other council house that they may be interested in. In some cases, council housing tenants are eligible for the Cash Incentive Scheme or easy Home Purchase Scheme; but to avail of any of these, they will be required to forfeit their council accommodation and purchase a house in the open market. Their purchase will be supported by local council authorities.
To Find out if you’re eligible for Right to Buy – Own Your Home contact your local council.
How Can I Buy My Council House?
In addition to the Right To Buy Scheme, there is also an option of buying your council house under a joint application. In this case, it is essential for the applicant to either file their council house application with someone as their joint owner and be willing to share their responsibilities as a house owner or have up to three family members (who have lived with them for at least 12 months) willing to share ownership rights.
Under “Preserved Right To Buy” you can purchase a council house that you lived in but the council sold it to a housing association landlord.
In case, you are a housing association tenant, you can apply for the purchase of your council house by filling the Right to Acquire Application Form. To be eligible, you must spend at least three years as a council house tenant and fulfil all the eligibility criteria that apply to local council tenants. However, you should not apply under the Right To Buy or Preserved Right To Buy schemes.
Voluntary Right To Buy allows you to purchase a council house that you may not have lived in.
What Is The Right To Buy Scheme?
The Right To Buy scheme was originally introduced in the UK around 40 years ago with the aim to provide discounts to council housing tenants who wish to purchase the property that they have lived in for a certain number of years. Although the scheme is now abolished in Wales and Scotland, council housing tenants in Northern Ireland and England continue to benefit from it as long as they can prove the following to confirm eligibility:
- they are currently living in the council home and it is their main residence
- none of the rooms is being shared with anyone else other than household members
- the applicant is under a secure tenancy agreement with their council housing landlord
- the applicant has been a council housing tenant for a minimum of three years
- there are no pending debt disputes against the applicant
Joint tenants are also required to fulfil the above criteria if they wish to apply for council house purchase under this scheme. In fact, applicants can apply with up to three family members who have lived with them for up to 12 months.
How Can I Apply For Right To Buy?
Under the Right To Buy (RTB) scheme you will be required to follow the below steps in order to purchase your council house:
- Fill an online RTB application form by providing the desired information.
- Save a copy of the online form, print it and send it to your landlord.
- Wait for your landlord’s response. (This may take anywhere between 4 to 8 weeks).
Your landlord may either choose to refuse by stating their reasons; which you can choose to appeal to should you not agree with the decision.
In case of their agreement to sell, the landlord’s response will include their offer as well as the following:
- their asking price for the property
- the amount of discount that they are willing to offer
- a detailed description of the property along with any land that is part of it
- details of any structural problems with the property or any service charges due
Can I Get A Discount On Purchasing A Council House?
Yes, if you are eligible for the Right To Buy scheme you will get a discount on purchasing a council house to a maximum limit of £84,000 across England (except for certain boroughs in London where it is £112,800). The amount keeps increasing with the rise in the rate of inflation every year.
The discount that you may avail on purchasing a council house is primarily is based on the following factors:
- The number of years that you’ve been a council housing tenant
- Whether you intend to purchase a flat or a house
- The monetary value of the property you intend to purchase
In the case of purchasing a council house, you may be able to get a 35 per cent discount; while in the case of a flat, it will be 50 per cent if you’ve lived in a council housing facility for between three to five years.
However, if you have applied under the Right To Acquire scheme, you will be able to get a discount of around £9,000 to £16,000 on the price of your property; depending upon where you live in the UK. This discount may reduce if you have previously applied for under a Right To Buy or Right To Acquire scheme.
The Right to Buy calculator can help you learn more about the discounts you are eligible for.
While many individuals choose to buy their council house with the intention of being able to save on rental payments and using their savings or cash windfall for a long term purpose, the cost of the property itself is not the only expense that they will need to bear. From legal transfer fees to mark a change in ownership to insurance coverage to repair and maintenance expenses, there are many areas to be considered prior to a property purchase.
While you may not be able to sell your recently bought council house until without foregoing the discount you availed during the purchase unless you’ve occupied it for at least five years after the purchase; if you want to rent out the premises, there is no restriction if you choose to do so immediately.
FAQs: How Long After Buying A Council House Can You Rent It Out?
Is it illegal to rent a council house?
If you are a Secure Tenant at a council house, you can sublet rooms with the permission of your landlord. As long as the subletting do not overcrowd the property, there is no restriction in subletting. However, if you are on Introductory Tenancy and do not have the authority to sublet your council house, you may be evicted for such actions.
Are you allowed to rent out a right to buy property?
Yes, you can rent out your right to buy property as soon as you are granted ownership.
Can I rent my council flat after Right to Buy?
Yes, you can rent your council flat after acquiring ownership. You may be required to pay a one-off subletting fee to your council authorities.
Can I decorate a council house?
Yes, you can decorate your council house and may even get vouchers from your local council to avail discounted prices on items. However, in the case of home improvements, you will first need to seek permission from your local council or social housing landlord beforehand.
Can you be refused Right to Buy?
Yes, you can be refused the Right to Buy if you fail to meet any of the conditions of the eligibility criteria, you are not a Secure Tenant or you share Joint Tenancy and your joint tenant has refused to proceed.