Western Mail Property Doctor Column #17
By admin
Issued on behalf of Emyr Pierce Solicitors
I want to buy my council house. How do I go about doing so?
Introduced in 1980, the Right to Buy scheme means that in the majority of cases, a secure tenant can buy their council home at a discount to the full market value.
If the secure tenancy was in existence prior to 18 January 2005 or the tenant was a public sector tenant before this date – a public sector tenant is one whose landlord is either a ‘Right to Buy’ landlord or one of the specified public bodies – then, to become eligible, they must have occupied their flat or house for a period of at least 2 years. Anybody that doesn’t fit in to this category is not entitled to purchase their property until they have spent at least 5 years as a public sector tenant. Special provisions do exist in the Schedule & Housing Act 1985 in relation to spouses and children.
The price payable will be the price the property would be expected to reach if it was sold on the open market – minus the discount to which the buyer is entitled under the ‘Right to Buy’ scheme, and imposed by the Housing Act 1985.
In essence, the longer the person has been a tenant, the more discount they are entitled to, up to the maximum limit which varies depending on location. Generally, this will not normally be less than 32% or more than 60% in the case of a house or less than 44% or more than 70% for a flat.
Another condition, known as the ‘cost floor’ may also apply and this will cause a reduction in any discount to take into account any money spent by a landlord on building work, repairs, renovation etc. in the 10-11 years before the ‘Right to Buy’ application is made. Similarly, if a tenant has already purchased a property under the scheme, any discount applied at that time will be deducted from a future purchase.
In terms of resale, an owner can sell at any point – however, if the application for ‘Right to Buy’ was made prior to 18 January 2005 and the sale is made within 3 years, some or all of the original discount received will have to be repaid. If within a year, this will be the whole discount, two thirds of it if within 2 years and a third if within the 3 year deadline.
Similarly, if the application took place after the aforementioned date and the property is sold within a period of 5 years, all of the discount will have to be repaid within 1 year, down to a fifth if it falls within the 5 year timescale.
I’m considering making alterations to my leasehold property, do I need to get consent?
The difference between leasehold and freehold is that if a property is said to be freehold, it means that both the property and usually the land on which it’s built, belongs to the owner and, as such, they are entitled to sell on or make alterations without conditions (subject to any relevant planning regulations).
A leasehold is different in that it doesn’t signify outright ownership but grants the right to live in a property for a specified time – a form of long-term tenancy, the length of which can vary between 99-999 years.
It is the freeholder that retains overall ownership and as such, can collect ground rent and service charges.
The agreed lease will set out any contractual obligations that have to be carefully considered. In relation to alterations or improvements, by law, consent of the freeholder must be sought before any work is undertaken.
In terms of flats, this is less relevant in that flats tend to be rarely altered, it comes in to play more in the case of leasehold houses.
As long as required building regulations / planning consents are in place, while it is unlikely that a freeholder will decline permission – for example for work such as an extension that will invariably increase the value of the property – it is imperative that permission is sought. The freeholder may also choose to increase ground rent in relation to any such work.
