15. Right to buy

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You may have theright to buy if you are a secure tenant and you have been apublic sector tenant for at least five years, if the tenancy wasgranted after 18January 2005, or two years if the tenancy was granted beforethat.

Right to BuyThis section aims to answer some common questions aboutRight to Buy. It is not an exact statement of the law. If you arethinking of buying your home, you should get good professional advice from a financial adviser, solicitor and surveyor.

This Right to Buy section relates to secure tenants only. If however you are an assured tenant, you may be entitled to the Right to Acquire.

If you require further details about the Right to Acquire, please contact the Leasehold Officer on 0161 218 1364 or email customer.finance@stockporthomes.org

Who can exercise the Right to Buy?

You may have the Right to Buy if you are a secure tenant andyou have been a public sector tenant for at least five years, if the tenancy was granted after 18 January 2005, or two years if the tenancy was granted before that. This does not have to be with Stockport Council or even in your present home. Tenancies with other councils or housing associations may count towards the time.

Are any kinds of home outside the Right to Buy?

Yes, the Right to Buy does not apply to certain types ofaccommodation, including:

• sheltered housing for the elderly;• housing for people with special physical and / or mental

needs;• accommodation let in connection with the customers job such as flats for school caretakers; and• temporary accommodation.

As well as excluding sheltered housing, we generally excludehomes that are particularly suitable for elderly people because of the location, size, design, heating system and other features. If we turn down your application for these reasons, you have a right to appeal and we will tell you how to go about it.

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You should carefully consider the structural condition of the property and its impact on sellingthe property in the future.

How is the price worked out?

We assess the market value of the property (disregarding anyimprovements you have made). We allow you a discount off thisfigure. You can, within three months, appeal to the districtvaluer if you disagree with our assessment of the market value.If you have had a discount in the past for another property youbought under the Right to Buy, that discount reduces thediscount for the current application.

If in the past 10-11 years we have spent a lot of money on theproperty, the price you have to pay (after discount) must bemore than the amount we have spent on the building. Thismay mean you get limited or no discount.

The discount rules:

A tenant of a house starts with 30% discount.This increases by 1% a year for each year of tenancy, up to amaximum of 60%.So a tenant of five years receives 30% + 5%(1% for each of the 5 years) = 35%.

A tenant of a flat starts with 40% discount.This increases by 2% a year for each extra year of tenancy upto a maximum of 70%.So a tenant of five years receives 40% +10%(2% for each of the five years) = 50%.

However, Government rules say that the maximum discount you can get is £26,000, however long you have been a tenant.

Defective property

Certain types of system built concrete properties have beenclassed as defective by the Government. One of these types isknown as Reema hollow panel, and a number of this type were constructed in Stockport in the 1960’s and 70’s. Because these properties are classed as defective, lenders will not usually offer mortgages on them unless costly remedial work has been done. If you live in one of these homes, you still have the Right to Buy. You will get a letter formally notifying you that your home is classed as defective. You should carefully consider the structural condition of the property and its effect on the selling price of the property in the future.

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If you buy your home, you will take on responsibility forany outstandingrepairs or structuralproblems.

Flats in high-rise blocks

If you buy a flat in a high-rise block, you should be aware thatsometimes it can be difficult to sell high-rise flats.

Sale restriction

If you buy a home under the Right to Buy Scheme you may sell it at any time, but if you sell within the first 10 years of buying you must give a local social housing provider the first option of buying from you. If the local social housing providers show no interest within eight weeks, you will be free to sell the property on the open market.This rule came in on 18 January 2005.

Discount repayment

If you sell within the first five years of buying you will have to repay the discount. A sale in the first year will mean you mustrepay 100% discount. This reduces by 20% for each completeyear of ownership, so that a sale in year five would mean youwould have to pay back only 20% of the discount. The discount repayable is based on a percentage of resale value of the property (improvements you have made are ignored).

If you buy a property valued at £95,000 and get a discount of£26,000, your discount in percentage terms is 27.37%. So if you sell your home in the first year of ownership you must pay us 27.37% of its market value.

If you sell your home in the fifth year of ownership, 20% of 27.37% of the property’s open market value must be repaid.

See below:• sale of house in fifth year of ownership: • market value: £150,000

• market value on original sale: £95,000 • discount on original sale: £26,000 • discount on original sale as a percentage of open-market value: 27.37%

Repayable discount:• current market value: £150,000 • discount on original sale: 27.37% = £41,055

• repayable in year 5: 20% of £41,055 • repayable discount: £8,211

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After you buy your home, you alone will be responsible forthe future decoration, repairand maintenance of the inside of the property and its services.

Getting a mortgage

There are many lenders offering different types of mortgages.Therefore you must consider all the options so that you canchoose the type of mortgage and provider that suit you best.You should take advice from an Independent Financial Advisor.

The Financial Services Authority (FSA) can help. You cancontact them on 0845 606 1234 or visit www.fsa.gov.ukRemember that if you can’t keep up the repayments on yourmortgage your lender may go to court to re-possess your home. The Council does not provide mortgages for tenants or future buyers.

Getting a survey

If you buy your home, you will take on responsibility for anyoutstanding repairs or structural problems. This is often referred to as ‘caveat emptor’ which means ‘let the buyer beware’.

To make the right decision, you must satisfy yourself about thestructural condition of the property. Before you buy your home, we will carry out a limited valuation inspection.

This is not a survey of the structure of the property. If you arebuying with a mortgage, the lender will require a mortgagesurvey. This involves a limited inspection to enable the lender to decide if the property offers suitable security for lending purposes - that is, whether they could sell it for enough to cover the cost of your loan if they had to repossess it in future. So we recommend that you get your own homebuyer’s report or structural survey.

You will have to pay for this, but your mortgage lender may agree to combine a structural report with the mortgage report, which will save you part of the cost. The report may still cost you hundreds of pounds but this is a small amount compared to the value of the property.

You can find addresses and phone numbers for local chartered surveyors that offer survey reports in the Yellow Pages or at www.ricsfirms.com

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If you buy a flat ormaisonette, Stockport Homeswill be responsiblefor the externalrepair andmaintenance of the block and its common parts.

Legal assistance

Most buyers ask a solicitor to handle the legal procedure of buying a home. You don’t have to use a solicitor – you canfind books to help you deal with the procedures and paperwork yourself.

Solicitors’ charges vary so it is worth getting quotes from several. You can find addresses and phone numbers for local solicitors in the Yellow Pages or at www.lawsociety.org.uk You may have to pay stamp duty land tax, which is a tax on buying property. The tax is worked out as a percentage of the price you pay for a property.

Repairs

After you buy your home, you alone will be responsible for thefuture decoration, repair and maintenance of the inside of theproperty and its services. If you buy a house, you will also beresponsible for all repairs and services to the outside of the property and its grounds. In the case of flats, we remain responsible for the exterior and common parts but recover our costs in the annual service charge. Building repairs can be costly, so it is important to get a survey before buying to make sure you know as much as possible about the property. Building materials deteriorate over time and replacing them can be expensive. Also, repairs may be needed when you can least afford them.

Set aside money regularly to cover such repairs. If you are a house owner, you should arrange for buildings insurance to cover the cost of repair or reinstatement in case of fire or a similar incident. However, such insurance will not cover you for repairs arising from wear and tear to the property.

We provide buildings insurance for flat / maisonette owners but recover the cost of providing it in the annual service charge.

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Service charges

If you buy a flat or maisonette, Stockport Homes will be responsible for the external repair and maintenance of the block and its common parts. We will also provide communal services such as lighting and caretaking. You will pay a service charge to cover these costs. These charges can vary according to what work is done in a particular year and the level of services provided in that year.

Some types of property need repairs more often than others, and Stockport Homes will carry out these repairs when they are needed. When we tell you the purchase price of a flat we will also estimate the service charge. This will indicate the charge that you will pay in the first five years, but obviously it depends what repairs are needed as to how much you have to pay.

Leaseholders have some protection in law, and the followingindependent website is worth looking at if you are thinking ofbuying a flat or maisonette: www.lease-advice.org

Occupation costs

You already pay for most of your utility costs (electricity,gas, sewerage and telecommunications) separately from yourrent. You pay council tax and this will continue if you becomean owner.

It is wise for everyone, whether a tenant or an owner, to insurethe contents of their home. Many policies are available so youshould seek several quotes to get the cover that suits you best.

Life assurance

Mortgage lenders may offer you life assurance to at least the value of the property. This means that if you die, the loan will be paid off. There are many providers of this cover and you should discuss with the lender what cover will suit you best.

Mortgage protection

You may wish to consider taking out mortgage protectioninsurance to cover payments in case you lose your income through illness or unemployment. Again, there are many providers and you should get prices from some of them and talk to your lender.

You may wish toconsider taking out mortgage protectioninsurance to cover payments in case you lose your income through illness or unemployment.

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Delays during the right to buy process

We have to deal with your right to buy application withinstrict time limits. You can find details in the booklet‘Your Right to Buy Your Home’ published by Communities and Local Government. We can send you a copy of thisbooklet, or it is available online on their website at:www.communities.gov.uk

However, if during the sale process we do not hear from youfor a long time, then we may serve notices that can end yourright to buy application.

How to applyTo request a right to buy information pack or to find out more,please contact the right to buy section on 0161 474 3221 or email righttobuy@stockport.gov.uk

Make sure you read the booklet ‘Your Right to Buy Your Home’.

If you wish to apply, please return completed form RTB1 to:

The Right to Buy OfficeStockport Legal Services2nd FloorStopford HouseStockportSK1 3XETel: 0161 474 3221

Make sure you read the booklet ‘Your Right to Buy Your Home’.