To work out whether you can afford to buy your council home you will have to consider the following.
Property valuation
Each property is valued individually according to the market values at the time you apply. The council does not hold records of property values and will only value a property once the tenant makes an application for the Right to Buy.
You can get some idea of your property’s current value by looking in the local paper for similar properties in your area, from a local estate agent or visiting a website such as Zoopla. The government website also provides a way of estimating the value: the Right to Buy Calculator. When you have estimated the value of your property you must subtract your discount.
Once we have accepted your application, a valuer will contact you to arrange to inspect your property. You will not have to pay for this.
The valuation cannot be increased because of any improvements you have made to the property. If you think that you have carried out any improvements to your property, you must tell us when you make your Right to Buy application. These improvements will not be included in the valuation.
If you disagree with the price, you can ask for the District Valuer to carry out an independent valuation. But you have to accept the District Valuer’s valuation, even if it is higher than the council’s, otherwise you will have to withdraw your application.
Right to Buy discounts
The government sets the discounts on the sale price of council-owned homes.
Houses
You get 35% discount if you've been a public sector tenant for between 3 and 5 years. After 5 years, for every extra year you've been a public sector tenant, the discount goes up by 1%, up to a maximum of 70% or £127,900 in London boroughs).
Flats
You get a 50% discount if you've been a public sector tenant for between 3 and 5 years. After 5 years, for every extra year you've been a public sector tenant, the discount goes up by 2%, up to a maximum of 70% (£127,900 in London boroughs).
Conditions
The amount of discount you get depends on:
- how long you have been a council tenant (you can include time you have lived in different properties and with different public sector landlords)
- whether the property is a house or a flat
- the age and condition of the property
You may be able to include time when your husband or wife was a public sector tenant, or when they were previously married to a public sector tenant. If you lived with your partners from the age of 16 and you later took over their tenancy, you may be able to include this period too. If you are buying your home jointly with someone else and they have been a public sector tenant for longer than you, the discount will be based on how long they have been a tenant.
The discount will be less if the council has spent money building or maintaining your home:
- in the last 10 years - if the council built or acquired your home before 2 April 2012
- in the last 15 years - if you are buying your home through Preserved Right to Buy or if the council acquired your home after 2 April 2012
You’ll usually have to repay some or all your discount if you sell your home within 5 years.
Costs of being a homeowner
You need to work out whether you can afford to pay the one-off costs and the regular costs of owning your home.
One-off costs will include solicitor's fees, stamp duty, survey fees and mortgage fees.
Regular costs will include monthly mortgage instalments, building insurance, repairs and maintenance.
A mortgage is a big financial responsibility so you need to be sure you can afford the monthly repayments, particularly if interest rates go up. If you do not keep up the regular monthly payments on your mortgage, you may lose your home.
Service charges
Under the terms of the lease, you must pay your share of the council’s costs of carrying out work and providing services to your building and estate. You do this by paying service charges. You cannot opt out of paying these charges. You will need to pay them every year you are a leaseholder. You can find out more about your rights and responsibilities and those of Homes for Haringey in the lease agreement.
Annual service charge
The bills for service charges can be quite high, so think carefully about the costs involved before you buy. Bills for major works are issued separately when these become necessary.
Sinking fund
As part of your service charge you will need to make advance payments towards the cost of future major works. We call this a “sinking fund”. You will need to pay this every year that you are a leaseholder, even if no works are carried out in that year. These payments will not be refunded, even if no work is carried out. They will remain on your account for future works.
Major works
If you buy a flat, you must also pay towards the cost of major works to your building. This includes work carried out to the windows. You must pay towards the cost of any lifts and controlled entry systems your building has, even if you do not use them. You must pay towards the cost of play areas on your estate, if your estate has them, even if you do not use them.
Major works bills can be very large, so we offer a number of payment options for these. Find out about our payment options.
Under Section 20 of the Landlord and Tenant Act 1985 (as amended) we have to consult you about major works before they are carried out.
Selling your property
If you sell the home you bought from the council under the Right to Buy within the first 5 years, you will have to pay the council a percentage of the re-sale value of your home (minus the value of any improvements you have made to your home). This must be the same percentage that was used to calculate the discount you got when you bought your home under the Right to Buy. The council will reduce the amount you have to pay by one fifth for each year that has passed since you bought your home. After 5 years of buying your home, you can sell it without having to pay the council back any money.
If you want to sell your home within 10 years of buying it, you must offer it back to the council first (or in some cases another social landlord such as a housing association). This is known as the right of first refusal.