A Right to buy housing association guide

In this brief guide, we will discuss the statement “ right to buy housing association”. The right to buy scheme is run by housing associations in the UK.

Right to buy housing association

The Government successfully ran a pilot which offered housing association tenants the right to buy their housing association homes. Right to buy was previously reserved only for council tenants. The Right to buy scheme for housing association tenants will now hopefully be available to housing association tenants in 2020.

Preserved right to buy

If you are a housing association tenant then it is very likely you didn’t have right to buy but you may still have been able to buy your housing association home with something known as the “preserved right to buy” or the “right to acquire” which was made specifically for housing association tenants.

You may have preserved right to buy if you were living in as a secure council tenant and your council house was transferred from your council to another landlord such as your housing association landlord. You must have been living in the home when it was transferred.

You may also still have preserved right to buy if you then moved to another property owned by your new landlord. You won’t have preserved right to buy if you then went on to move to another property owned by another landlord.

Preserved right to buy lets you buy the home under the same terms as a council tenant would be able to access.

Right to acquire

If you are a housing association tenant and don’t have the preserved right to buy you may still be able to purchase your home under the right to acquire scheme but this will be at a much smaller discount than the right to buy scheme.

You can apply if you have had a public sector landlord for at least 3 years, they can be:

the armed services

NHS trusts and foundation trusts

housing associations

Councils

For your property to be eligible it must have:

Been built or bought by a housing association after 31 March 1997 (and funded through a social housing grant provided by the Housing Corporation or local council)

transferred from a local council to a housing association after 31 March 1997

Your housing association landlord must be registered with Homes England.

The home you want to buy must also be:

a self-contained property

your only or main home

The right to buy pilot

The government ran a voluntary right to buy pilot to see if housing association tenants could assess the right to by scheme. The right to buy pilot for housing association tenants was run in tandem with the National housing federation. The pilot had £200m to invest in the scheme and was run across the Midlands. This pilot scheme began in 2018 and will run for 2 years.

Right to buy for housing associations

The housing secretary recently announced that housing association tenants will be allowed to buy 10% of their homes in a shared ownership style scheme under the right to buy. It is being termed as the shared ownership “right to buy” for housing association tenants. The housing secretary stated that hosing association tenants will be able to buy 10% of the equity in their homes and then every 1% after that till full ownership if desired. The scheme is not live yet but rather was a proposal by the housing secretary.

On the right to buy for housing associations, the housing secretary Mr Jenrick said: “I want to ensure that residents living in new housing association homes are given the opportunity of climbing onto the property ladder by giving them the right to shared ownership of their homes.

“This means that tenants in new stock will have an automatic right to buy a share of their home, as little as 10%, and increase that share over time. I also look forward to working with housing associations on a voluntary basis to open this opportunity to those living in existing properties.

“As Conservatives, we know that owning a home is not just about the four walls around you, it’s about investing in your family, saving for the future and putting down roots in a community. We are on the side of hard-working people who want the sense of security that comes with homeownership.”

A press statement issued by the Conservative Party today said: “We want to work with housing associations on a voluntary basis to determine what offer can be made to those in existing housing association properties.

“For those tenants in new stock, there will be an automatic right to buy a share of their home from as little as 10%, with the ability to increase that share over time, up to full ownership.”

FAQs: Right to buy housing association

Alternatives to the right to buy scheme

There are a few alternatives which you may be able to use rater than the right to buy scheme, They could increase your mortgage deposit, they include:

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Getting a mortgage for your right to buy home

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we will discuss the statement “ right to buy housing association”. If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.