Council houses are a common type of property in the UK.
And the UK government has introduced schemes to purchase them in recent years.
But you may be wondering, ‘can I buy my council house for cash?’. And if so, how is this done? Read on to find out.
What is a council house?
A council house is a property built by a local authority then rented to local people.
Council houses are usually built alongside others on a council estate.
When were council houses first built?
The first council houses were built in 1896 in Bethnal Green, London. And their number has increased ever since.
So, they are a relatively new type of UK property.
(There are various ways to find out the age of your house if you are interested).
How to rent a council house
You can apply for a council house through your local council.
You should keep in mind that you are not guaranteed to get a property. You will be put on a waiting list after applying.
What is Right to Buy and does it still exist?
‘Right to Buy’ is a government policy in the United Kingdom.
In short, Right to Buy gives council house tenants the right to buy the property at a discount.
It is one of several UK government home-buying schemes currently in place.
It is still in place throughout England at the time of writing. Different rules apply for Wales, Scotland and Northern Ireland.
If you qualify for Right to Buy, you get a discount. The eligibility involves the following:
- It’s your only or main home
- It’s self-contained
- You’re a secure tenant
- You’ve had a public sector landlord (for example, a council, housing association or NHS trust) for 3 years.
You can make a joint application with someone who shares your tenancy.
This also applies to up to 3 family members who’ve lived with you for the past 12 months (even if you don’t share the tenancy with them).
How much is the Right to Buy discount?
Maximum discounts
The maximum discount is £102,400 across England, except in London boroughs where it is £136,400.
These figures are accurate at the time of writing. It will increase each year in April in line with the consumer price index.
Discounts for council houses
With council houses, you get a 35% discount if you’ve been a public sector tenant for between 3 and 5 years.
The discount then goes up by 1% for each year after that.
Discounts for council flats
With council flats, you get a 50% discount if you’ve been a public sector tenant for between 3 and 5 years.
The discount then goes up by 2% for each year after that.
Can I buy my council house for cash?
Yes, it is possible to buy your council house for cash.
Most people get a mortgage when buying a council house. This is usually because they cannot afford to do it any other way.
But if you have the funds to be a cash buyer, nothing is stopping you from doing so.
Costs involved with buying my council house for cash
Though you buy your council house for cash, costs are still involved.
Solicitor fees
Fees for solicitor services will be needed for transferring funds.
They can also help you complete any paperwork needed to apply for ‘Right to Buy’. There is sometimes a Land Registry fee and a transfer fee.
The average solicitor’s fees are around £1,567 when buying a house. You might expect your costs to be slightly below this because no mortgage processes are involved.
Surveys
It is highly recommended that you pay for a survey before completing the purchase.
Even though you have been living there for a while, there are often situations that you are unaware of, including:
- Planning permission restrictions
- Building methods
- Local developments planned nearby.
And more.
A survey costs around £450 on average, although this varies based on the value of your house, location within the country, and much more.
Searches
It’s still worth getting searches done on a property you buy with cash. These usually cost between £250 to £300.
Should I get legal support when buying my council house for cash?
Legal support is extremely helpful in all property transactions.
Unless you have prior legal experience, it ensures that everything is done smoothly and correctly. Mistakes will cost you money otherwise.
As mentioned above, even without a mortgage, legal processes are involved when buying a house.
So yes, getting a solicitor or conveyancer to help you is highly recommended.
Advantages of buying a council house for cash
When you buy a property for cash, you don’t pay interest on a mortgage, meaning you have no monthly outgoing payments.
You can buy your council house at a discount. This is once again an excellent financial opportunity.
As mentioned above, your legal fees might be slightly lower when you buy your council house for cash.
Cash buying is usually a quicker process than regular sales. So you will be able to complete relatively fast.
Disadvantages of buying a council house for cash
Council houses are often in less desirable locations.
Many people don’t consider council estates very attractive. Many were built quickly and en masse. So, they often look plainer than private houses.
Buying a council house through the ‘Right to Buy’ discount (whether with cash or a mortgage) means living there for another five years.
So, if you are forced to sell before then, you will find yourself paying back the discount.
Speak to an independent expert if you need more guidance on this situation.
You should also check the government website to ensure you know up-to-date ‘Right to Buy’ terms and conditions.
