Buying a Council House New Rules

Home Buying a Council House New Rules
Sunny Avenue
Mortgages Sunny Avenue
31 May 2024

The UK government has provided various schemes to help council house tenants become homeowners at discounted rates.

Over the past 40 years, these schemes have helped many families purchase their council homes and get a foothold on the property ladder.

Now, when buying a council house new rules have been introduced, so it's essential to stay informed about the latest changes.

This insight provides a comprehensive guide to buying a council house under the new rules. It will cover eligibility criteria, discounts, application processes, financing options, and additional costs. 

Key Takeaways:

  • Remember when buying a council house, new rules will continue to be introduced including regulatory changes. Where you may have previously not been eligible you could now be. Rule changes include:
  • Repayment of the discount is necessary if the property is sold within the first five years of ownership, with decreasing percentages to repay each year.
  • Eligibility for buying a council house requires meeting specific criteria, such as being a secure tenant and having a public sector landlord for at least three years.
  • If you sell within ten years of purchase, it must first be offered to the original or another social housing landlord before being sold on the open market.

Buying a Council House New Rules:

The Right to Buy scheme has been in existence for over 40 years and allows eligible council house tenants in England to buy their homes at a discounted rate. The scheme has been abolished in Scotland and Wales, and it's gradually being reduced in Northern Ireland. For tenants living in housing association properties, the Right to Acquire scheme offers a similar opportunity to purchase their homes at a discount. This scheme is distinct from the Right to Buy scheme, so it's essential to understand the individual eligibility criteria and application processes for each.

New rules are as follows:

Eligibility Criteria for Buying a Council House

To be eligible for buying a council house under the new rules, you must meet certain criteria:

  • The property must be your only or main home.
  • You must have a legal contract with your landlord, making you a secure tenant.
  • The house should be self-contained, with no shared rooms with people outside your household.
  • You must have had a public sector landlord (council, housing association, or NHS trust) for at least three years, although not necessarily consecutively.
  • You should have no legal issues involving debt, such as a county court judgement.

Discounts Available for Buying a Council House

The level of discount offered to tenants is a significant incentive to consider purchasing a council property. The discount varies depending on the property type (house or flat), location, and the length of tenancy.

At present, the highest value of the discount is £87,200 or £116,200 if you live in London. However, this is subject to change in April.

Discounts for Houses

If you have lived in a council or housing association house for between three and five years, you will receive a discount of 35% off the market value of the property up to the current maximum discount value. If you have been a tenant for more than five years, you will be eligible for a discount of an additional 1% for every extra year you have lived there, up to a maximum of 70% or the current maximum cash value, whichever is lower.

Discounts for Flats

For flats, the discount is higher. If you have lived in a council or housing association flat for between three and five years, you will get a 50% reduction on the market value up to the current maximum monetary value. If you have lived there for five years or more, the discount increases by 2% each year up to a maximum of 70% or the maximum monetary level, whichever is lowest.

Repaying the Council House Discount

While living in the property, you are not required to repay the discount. However, if you decide to sell within a certain period, you may need to repay a portion of the discount:

If you sell within the first year of ownership, the full discount must be repaid.

From the second year onwards, the repayment amount decreases according to the following table:

If you sell within: % of discount to repay
Year 2 80% of discount
Year 3 60% of discount
Year 4 40% of discount
Year 5 20% of discount


After five years, you are not required to repay any discount. Note that the repayment amount is based on the house value at the time of sale, not the purchase price.

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Application Process for Buying a Council House

If you decide to purchase your council house, you must follow these steps:

  • Complete an RTB1 application form, which is your application to join the Right to Buy scheme.
  • Send the completed RTB1 form to your landlord via special delivery to ensure receipt.
  • Wait for your landlord's response. They have up to eight weeks (four weeks if you have been a tenant for more than three years) to respond. If they reject your application, they must provide a reason.
  • If your landlord agrees to sell, they will send you an offer detailing the price, discount, property description, and other relevant information.
  • You have 12 weeks to accept or decline the offer. If you change your mind, you can continue renting the property.

Financing Your Council House Purchase

After accepting the offer from your landlord, you will need to secure a mortgage to finance your property purchase. Many lenders will accept the property discount as a deposit, but this is not guaranteed for all lenders. It's essential to research different mortgage options and consult with a professional financial or mortgage adviser before making a final decision.

Additional Costs to Consider

When buying a council house, you should be aware of the additional costs associated with homeownership. These include:

  • Repairs and maintenance, which were previously the responsibility of your landlord.
  • Stamp Duty, a tax payable on property or land purchases in England or Northern Ireland.

Consult your solicitor or a financial adviser to help you understand these costs and any other expenses associated with homeownership.

Selling Your Council House

If you choose to sell your property within ten years of buying it through the Right to Buy scheme, you must first offer it to the original landlord or another social housing landlord in the area. The landlord has eight weeks to respond. If they do not express interest, you can sell the property on the open market.

Right to Acquire Scheme for Housing Association Tenants

If you do not qualify for the Right to Buy or Preserved Right to Buy schemes, you may be eligible for the Right to Acquire scheme. This allows many housing association tenants to buy their homes at a discount, up to a maximum of £16,000. The eligibility criteria are similar to the Right to Buy scheme, with a few additional requirements. Visit the website for more information on the Right to Acquire scheme and how to apply.

Buying a Council House New Rules Summary

Buying a council house under the new rules can be a fantastic opportunity for eligible tenants to become homeowners at a discounted rate. Understanding the eligibility criteria, application process, financing options, and additional costs is crucial to making an informed decision. If you're considering purchasing your council house, seek professional advice from a financial adviser or mortgage adviser to ensure you make the best decision for your circumstances. Remember, when buying a council house new rules will continue to be introduced so be sure to keep up to date with any changes.

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Stuart is an expert in Property, Money, Banking & Finance, having worked in retail and investment banking for 10+ years before founding Sunny Avenue. Stuart has spent his career studying finance. He holds qualifications in financial studies, mortgage advice & practice, banking operations, dealing & financial markets, derivatives, securities & investments.

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