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RTB - I already own my home

Online ContactEmail: Right to Buy 


For any specific queries relating to your own circumstances, you should first contact the government's official Right to Buy Agent service.

The information shown here offers advice on common queries received from those who have bought their home using the Right to Buy (RTB).

 

RTB selling

I want to sell my home

If you sell your home within ten years of purchase, you must first offer it to us as we have the right of first refusal. There are time limits which apply. You should contact us at the time for up-to-date advice.

If you sell your home within five years of buying it, you will have to pay back some money.

 

How much of the discount will I have to repay?

If you sell your home within five years of buying it, you will have to repay an amount based on the original percentage discount that you received, how long it's been since you bought your home and how much you sell it for.

There is a charge against your home for this. If you have a mortgage, then the mortgage is the first charge and the discount repayment is a second charge.

The amount to repay reduces based on how long it has been since you bought your home.

In the first year following purchase, the full amount must be paid back. This reduces to 80% in the second year; 60% in the third; 40% in the fourth; and finally 20% in the fifth year.

Example

You bought your home worth £200,000 and got a 35% discount (£70,000). You then sold your home after 18 months for £230,000.

35% of £230,000 is £80,500. This is the second year, so you would need to pay 80% of £80,500 (£64,400).

Depending upon when you sell your home and the sale price, you may have to repay an amount greater than the discount that you received.

 

RTB Borrowing

What is the financial charge against my home?

If you bought your home less than five years ago, we have a financial charge against your property.

This charge is there for the purposes of discount repayment.

  • It means that if you sell your home within five years of buying it, you have to repay an amount based on the discount you received when you first purchased your home from us.
  • It also means that if you want to re-mortgage with your existing or a different lender, or borrow more money, and you are within this five year period, you will need us to postpone this charge as your mortgage provider will require that the re-mortgage or additional borrowing keeps priority over our charge.
  • Without our consent to postpone our charge, it is very unlikely that the mortgage provider will approve the borrowing, whether for re-mortgage or for an additional amount.

For us to consider the postponement of our charge, you must pay a non-refundable fee in advance, currently £150.

 

Does paying the administration fee guarantee that you will postpone your charge?

No, it does not. The administration fee is non-refundable. This must be paid regardless of whether or not we give our consent to postpone our charge.

There are limited circumstances in which we will give our consent. Our options to agree to postpone our charge are stated in s156 of the Housing Act 1985 (as amended).

If we postpone our charge, this means that we agree for it to remain secondary to any mortgage, re-mortgage or further borrowing.

We will only postpone our charge where the borrowing is for an approved purpose and the money is being provided by an approved lender. We charge a non-refundable fee for considering to postpone our charge.

Approved purposes

To enable you to re-mortgage with a different lender, without extra borrowing.

If you are a leaseholder, to pay for service charges.

If you only own part of your home, to make an interim or final payment.

To pay for works to the property as defined by s184 of the Housing Act 1985 (as amended).

There are no other situations where we would agree to postpone our charge.

Please note that we consider extensions or conservatories to be additions, rather than works to the property and we will not agree to postpone our charge to pay for these types of work.

 

How can I apply to postpone the charge?

Your lender will need to make an application requesting us to agree to defer our charge on the property. They must do this in writing or by email. The lender should detail how much they are lending to you and what this covers.

You will need to pay us the administration fee stated above in advance.

You must confirm the amount of the current mortgage and any extra borrowing, if there is any. You and anyone else named on the lending will need to provide written consent for us to deal with third-parties and undertake any necessary checks, including credit checks. This is for the detection and prevention of fraud.

If there is extra borrowing, you must provide satisfactory quotes that we can verify if needed, that meet or exceed the level of extra borrowing.

 

Is the financial charge different from the right of first refusal?

Yes, it is.

The financial charge is there for the purposes of discount repayment and applies for five years from the date of purchase.

The right of first refusal is held against your property and applies for ten years from the date of purchase, not just to you, but to anyone that you or they may sell the property on to in those ten years.

 

Will this mean I don't have to repay any discount?

If you are not selling your home, and the re-mortgage or extra borrowing only involves those who were part of the original purchase, then there is no need to repay any discount.

If a new individual is involved, who wasn't part of the original purchase, this may be considered to be a disposal and therefore some discount may have to be repaid.

To avoid confusion or unnecessary expense we would recommend that you contact us, using the details above, before making an application to request that we postpone our charge.

 

 

More information or to return to the main page
 

I want to buy my home Right to Buy I am not a council tenant  

  


 
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Updated: 10 Jun 2019
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