What Are Right to Buy Loopholes?
The Right to Buy scheme is one of the many ways to purchase a council house in the UK. While it applies to council housing tenants only; however, over the years, there have been a few loopholes found in its requirements due to which a number of private landlords have been known to fund the purchase of council homes and then rent them out in the open market. The aim of this blog post is to explore those loopholes and what are the conditions under the Right to Buy schemes that have been misused in this regard.
What Are Right to Buy Loopholes?
While the Right to Buy scheme was introduced by the UK government to help individuals earning a low income step up on the property ladder by becoming homeowners, there has been misuse of the scheme over the years.
One of the prerequisites of the Right to Buy is that the intended buyer must have been a council housing tenant for a minimum period of three years before they share their intention to purchase the council house that they live in. There are higher prospects of a council housing tenant having limited income and savings (this is the reason they qualify for council housing). Therefore, one of the ways through which certain tenants with limited savings have become council house owners through Right to Buy is being funded externally, mostly through a family member providing the funds to purchase the council house while the tenant remains the owner on paper.
There have been many cases over the years that suggest that council homes bought in this manner are usually resold in the open market; at times within a month’s time. While the sellers are aware that they will have to give up the discount that they received from the council on purchasing the council property, it is most likely that the profits they make from selling the property cover this loss.
In addition to this, tenants may be provided with eh funds to purchase their council house from an independent landlord so that once bought they can resell the ex-council property at a profit.
Who Can Buy A Council House Under The Right To Buy Scheme?
Although the Right to Buy 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
Under the Right To Buy scheme you will be required to follow the below steps in order to purchase your council house:
- Fill out 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).
Can My Son Buy My Council House For Me?
Yes, your son can buy your council house for you. If he lives with you, both of you can file a joint application and apply for co-ownership. However, if your son will not be sharing the council house with you, one of his options is to purchase the council house under the Right to Buy scheme. Through this, council houses can be purchased by local council tenants but there are certain basic conditions to be met. These include the following:
- 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
Family members who have not lived with you for at least the past 12 months cannot apply to purchase a council house for you under the Right To Buy scheme. However, they can still provide you with the required funds to purchase your council house. In this case, the legal ownership of the property will be in the name of the resident and not the financier.
The discussion in this blog post makes it quite clear that the biggest loophole in the Right to Buy scheme is the option of allowing other family members to fund the purchase of a tenant’s council house. Independent research suggests that when council homes are not bought directly by tenants from their own income or savings, they are resold in the open market soon after being bought.
FAQs: What Are Right to Buy Loopholes?
Do you need a solicitor for Right to Buy?
Yes, you will need a solicitor to manage the legal requirements and paperwork required under the Right To Buy scheme to purchase a council house.
Can I be refused the 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.
Are council houses cheaper to buy?
Yes, council houses are generally cheaper to buy than properties listed on the open market. In fact, while purchasing a council house, you may be able to avail certain discounts as well to make the purchase affordable and convenient for buyers.
Can a family member help me buy my council house?
Yes, a family member can help you buy your council house by providing the necessary funds. However, legal ownership of the property remains in the name of the eligible tenants.
Can my son inherit my council house?
Yes, your son can inherit your council house especially if you are a Secure Tenant and there has been no previous succession to the property.
Whose Right to Buy? New research raises fears of fraud
Buying Council Flat: Right To Buy – HomeOwners Alliance
Council housing: Buy your council home – GOV.UK