“No man acquires property without acquiring with it a little arithmetic also” – Ralph Waldo Emerson (1803-1882).
Setting aside party politics and whether it would be fair for tenants of Housing Associations to receive government money to assist in purchasing their homes when funding is not available to private sector tenants, is there a need to extend the Right to Buy?
If asked, many would say that the Right to Buy was a child of the ’80’s but, in fact, Local Authorities were able to sell to tenants long before this – going back to the Housing Act 1936 which was extended in the 1950’s.
The present day Right to Buy scheme allows most Local Authority tenants to buy their council homes on a discount, subject to meeting certain criteria. This right already extends to Housing Association tenants who entered into their tenancies before the 15th January 1989. In addition, if the home used to be owned by the Local Authority but they sold to another landlord, like a Housing Association, while the Tenant was living in it, there may still be a “Preserved Right to Buy”.
The vast majority of Housing Association tenants are assured tenants and so do not have the statutory Right to Buy their home but the Right to Acquire was given in the Housing Act 1996. This gives a statutory right for tenants of Housing Associations to acquire their homes at a discount. Again, this scheme is subject to meeting certain criteria but the discount offered is less generous than under the Right to Buy scheme.
If a tenant of a social landlord does not qualify for a Right to Buy or a Right to Acquire or cannot afford to exercise those rights, the existing Social Home Buy Scheme may assist them in buying a share of their rented home. It is a discretionary scheme and not all Local Authorities and Housing Associations have joined. The scheme operates on a shared ownership basis – a tenant would buy a minimum of 25% of the value of the property, which is then discounted and rent is payable on the un-owned share of the property. Staircasing is permitted in 10% tranches up to 100%.
Other, more generally available, shared ownership schemes are provided through Housing Associations under which, subject to meeting certain criteria, a tenant might buy a share of their home – 25% to 75% of the home’s value and pay rent on the remaining share. Staircasing may be undertaken in 25% tranches.
There are separate schemes for “older” people (those 55 and above) or for those people with long term disabilities.
As can be seen, there are a number of existing schemes that assist Local Authority and Housing Association tenants – we can provide you with guidance and assist you whether you are exercising the Right to Buy, the Right to Acquire or entering into a shared ownership arrangement, or staircasing.
For more information please contact our conveyancing team on 0116 2628596.