Increase in ‘Right to Buy’
We are seeing a large increase in enquiries from those looking to purchase the property they live in at a discounted price, as offered to them by the local council or housing association.
Termed as ‘Right to Buy’ or RTB, usually the minimum period to live in the property to obtain a discount is five years and the discount from the open market value of the property could be as much as £75,000!
But note, the five years as a council tenant does not necessarily have to be in a row, and may possibly be different addresses. Terms and conditions apply!
Lenders will look to assist those looking at RTB purchases and some offer mortgages with minimal, or no deposit required.
For those who may have had a historic issue with their finances, again, there are lenders who will assist, but they are likely to require a deposit of up to 25% of the discounted purchase price.
Right to Acquire is another term we are seeing used more lately.
Usually the customer living in the property is eligible for a discount varying from £9,000 to £16,000, depending on where they live. As with RTB, there are lenders who will assist, but they are a little more limited in number for this type of scheme.
Another option is called Shared Ownership. As the name suggests, the purchase of a property is shared with another party, usually a Housing Association. First time buyers, if eligible, can purchase a percentage of a property (between 25% and 75%) and a Housing Association purchases the remainder.
The buyer then pays rent on the latter percentage, in addition to their mortgage payments, with the option to purchase an increased share of the property later on. There are many schemes available and a good supply of properties, so do review all the options available.
Finally, the Nationwide House Price Index suggests that house prices rose by 0.2% in February and the typical UK house price average now stands at £162,638.
Dale Jannels - AToM director