Local authority purchase

Local Authority Purchase

If you are a Local Authority or housing association tenant you may have the right to purchase your property.  The rules for purchase and discounts available vary  and much depends on the length of time that you have been a tenant.

From 1st March 2011, first time Council tenants no longer have the right to buy their Council property as a result of change in legislation.  Also, if an existing tenant moves to a “new supply Council property”, that is one which was builtafter 25th June 2008 or bought by the Council after that date, they will also not have the right to buy whilst living in that property.

To check to establish whether you are eligible to buy you can click here

What You Should Do If You Are Eligible

If you are eligible then you should download the appropriate application form from your Landlord and submit it. The property will then be valued by the District Valuer on behalf of the Local Authority and an Offer to Sell will be made to you.

You will have two months within which to accept this (it may look from the Offer that you have only one month to accept but you have one month if you wish to make any objections to the Offer i.e. challenge the price or the discount you have been offered).  You have two months to accept.

Within that period we have to establish that you will be eligible for a mortgage.  Check out your mortgage options by clicking here

If you wish to proceed, contact us for a free initial consultation and we will talk you through the process.

The Offer forms one part of the legal contract for your purchase so before we accept the Offer we have to establish that you can hold up your side of the contract that is to pay the purchase price on the date of entry.

When we have established a mortgage lender we instruct a Surveyor to look at the property for mortgage purposes.

(The property has, of course, been the subject of a valuation by the District Valuer but this is only for the Local Authority’s purposes and is not suitable for your mortgage application.)

An important point in the small print is that the insurance risk passes to you as at the date we accept the Offer so before we accept the offer we have to put in place Buildings Insurance.  You will already have your own contents insurance independently but Buildings Insurance must be put in place at this stage.

If you did not have Buildings Insurance in place and there was damage to the property the Local Authority would point to the contract and would not carry out any repairs.

When the mortgage is agreed in principle and the Buildings Insurance is in place then we accept the Offer on your behalf.  If the valuation is acceptable then we can accept the Offer on your behalf.

The Local Authority will then arrange for a plan to be drawn up which will form the basis of your title.  The mortgage lender will process your mortgage application and send you an Offer of Loan.  At this time they will also send us the Loan Instructions which instruct us to prepare the mortgage documentation.  We arrange for you to call in to the office to sign the mortgage documentation along with a Second Security for the Council which will provide that in the event that you sell the property within three years after purchasing you will have to repay a proportion of the Discount on a sliding scale.

We then request the mortgage funds from the lender, obtain from you payment of the fees and any balance that you are contributing from your own resources and we pay the price over to the Local Authority.  You stop paying rent at that time and start paying the mortgage.  The Local Authority will write to you to tell you whether you are overpaid or underpaid as at the date we pay the price over.

You will then own the property and accordingly it would be appropriate to prepare a Will if you have not already done so.  You can check out Wills byclicking here