Council and Housing Association tenants may have the right to buy their property from the landlord at a discounted price. There is strict eligibility criteria and further information can be found here: https://www.gov.uk/right-to-buy-buying-your-council-home
If a tenant is eligible this may prove to be a sound investment as depending on the amount of time the property has been rented, a substantial discount on the market value may be offered. The discount is however repayable on a sliding scale if the property is sold within a given period of time so this should be viewed as a longer term investment.
Some properties purchased through the Right to Buy Scheme contain restrictions on re-sale such as the property may only be sold to someone who has been resident or worked in the area for three years preceding the purchase (known as the local covenant) or that it must be first offered back to the Council. These restrictions may mean that the property would be harder to sell than other properties as the pool of potential buyers is smaller and not all lenders will lend where such restrictions are in place.
As a note of caution, it is also worth considering whether there are other costs other than any mortgage you take out which may make the proposal unaffordable– a Leasehold property would usually require payment of monthly service charges and a share of any large scale maintenance costs. If major works are required, this could be very costly
If you have any questions about the legal process or require a quotation for assistance with a Right to Buy purchase, we would be very happy to help. For more information please contact Carolyn.thomas@beersllp.com or Wendy.evans@beersllp.com Tel: 01752 246000
