How Long After Buying A Council House Can You Sell It?
According to an article that appeared on the BBC website titled Right to Buy homes made £2.8m in profit ‘in weeks’ a total of 139 council homeowners who bought their property under the Right to Buy scheme ended up selling it within a month of the purchase. Collectively, this is a £2.8 million profit for the sellers.
Many individuals have now started to question the viability of council houses if they are to be sold in the open market while sellers make a profit on the sales on property that was initially intended to support the vulnerable members of the society. This is perhaps the reason why there were demands in 2016 to abolish the Right to Buy scheme across England as has been done in Scotland and Wales with the aim to protect and provide council homes to those who are in dire need of low-cost housing options.
How Long After Buying A Council House Can You Sell It?
Although you can legally sell your council house anytime after the purchase and completion of documentation for transfer for ownership, however, if you sell it before the end of a five-year term, you will have to repay the discount that you availed under the Right to Buy Scheme.
Similarly, if you sell your council house before the end of a ten-year term, you will first have to offer it for sale to your council authorities or social housing landlord before you list the property for sale in the open market. If the landlord does not agree to buy the property or there is a conflict in the price that you offer versus the one they are willing to pay and there is no settlement between both the parties within 8 weeks, you can list your council house for sale in the open market.
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 increase, 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.
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|
In cases where your home is located within the premises of a national park, an area of outstanding natural beauty or an area that the government has categorised as rural for Right to Buy, your former landlord may restrict you from selling the property in the open market.
For a detailed overview of the topic, we will explore the following areas of interest through this article:
- How Long After Buying A Council House Can You Rent It Out?
- 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?
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 tent out the property and informed the council authorities.
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, your 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 Aquire 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.
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).
FAQs: How Long After Buying A Council House Can You Sell It?
Can you buy and sell a house right away?
Although you can legally sell your council house anytime after the purchase and completion of documentation for transfer for ownership, however, if you sell it before the end of a five-year term, you will have to repay the discount that you availed under the Right to Buy Scheme. Similarly, if you sell your council house before the end of a ten-year term, you will first have to offer it for sale to your council authorities or social housing landlord before you list the property for sale in the open market.
Is it hard to sell ex-council house?
While there is no evidence to prove whether it is harder or easier to sell an ex-council house, there are many pros and cons of buying one that is considered when a deal is made. Generally speaking, council houses are mostly bought by those property buyers who are keen to purchase property that is less costly as compared to private property available in the open market.
Can you sell house after one year?
Yes, you can sell your house after one year; or even one month after you’ve purchased it. However, homeowners generally prefer to cover the purchasing cost of a property prior to making a resale. If you’ve bought a council house, selling it before 5 years means that you will have to repay the discount availed through the Right to Buy scheme.
How long do you have to live in a house to avoid capital gains?
You need to have lived in a house for at least two years (these may be consecutive or non-consecutive) before you can avoid capital tax gains.
Are ex-council houses worth buying?
Yes, ex-council houses are definitely worth buying as they are not only cheaper than private property but also more spacious.