Can I Buy My Council House And Rent It Out?

It is not only common for council housing tenants to purchase their council house but renting it out after making the purchase is a profitable venture for many. Through this article, we aim to explore whether you can buy your council house and rent it out and how soon after the purchase can you do so. In addition to this, we will also discuss the different schemes under which you can purchase a council house, learn about whether you can sell a council property after purchasing one and whether someone else in your family can provide the funds for the purchase that you make.

Can I Buy My Council House And Rent It Out?

Yes, you can buy your council house and rent it out. In fact, according to some estimates, nearly 40 per cent of council property is rented out after it has been bought by tenants. Your local council may charge a one-time subletting fee which can be discussed with their legal team once you’ve made your decision to rent out the property and informed the council authorities.

You can rent out your council house immediately after buying the property as there is no legal restriction on renting the place out once the process of transfer of ownership and other legal documentation is complete.

One of the most common ways to purchase council property is the Right To Buy Scheme. Under this, council houses can be purchased by local council tenants by fulfiling the following conditions:

The council house is the applicant’s main home
The property is self-contained
The applicant is a secure tenant
The applicant has had a public sector landlord for at least five years

However, the Right To Buy Scheme only allows council tenants to purchase the property that they are living in and not any other council house that they may be interested in. In some cases, council housing tenants are eligible for the Cash Incentive Scheme or easy Home Purchase Scheme; but to avail of any of these, they will be required to forfeit their council accommodation and purchase a house in the open market. Their purchase will be supported by local council authorities.

In addition to the Right To Buy Scheme, there is also an option of buying your council house under a joint application. In this case, it is essential for the applicant to either file their council house application with someone as their joint owner and be willing to share their responsibilities as a house owner or have up to three family members (who have lived with them for at least 12 months) willing to share ownership rights.

Under “Preserved Right To Buy” you can purchase a council house that you lived in but the council sold it to a housing association landlord.

In case, you are a housing association tenant, you can apply for the purchase of your council house by filling out the Right to Acquire Application Form. To be eligible, you must spend at least three years as a council house tenant and fulfil all the eligibility criteria that apply to local council tenants. However, you should not apply under the Right To Buy or Preserved Right To Buy schemes.

Voluntary Right To Buy allows you to purchase a council house that you may not have lived in.

How Can I Buy A Council House Under The Right To Buy Scheme?

The Right To Buy scheme was originally introduced in the UK around 40 years ago with the aim to provide discounts to council housing tenants who wish to purchase the property that they have lived in for a certain number of years. Although the scheme is now abolished in Wales and Scotland, council housing tenants in Northern Ireland and England continue to benefit from it as long as they can prove the following to confirm eligibility:

they are currently living in the council home and it is their main residence
none of the rooms is being shared with anyone else other than household members
the applicant is under a secure tenancy agreement with their council housing landlord
the applicant has been a council housing tenant for a minimum of three years
there are no pending debt disputes against the applicant

Joint tenants are also required to fulfil the above criteria if they wish to apply for council house purchase under this scheme. In fact, applicants can apply with up to three family members who have lived with them for up to 12 months.

How Can I Apply For Right To Buy?

Under the Right To Buy (RTB) scheme you will be required to follow the below steps in order to purchase your council house:

Fill out an online RTB application form by providing the desired information.
Save a copy of the online form, print it and send it to your landlord.
Wait for your landlord’s response. (This may take anywhere between 4 to 8 weeks).

Your landlord may either choose to refuse by stating their reasons; which you can choose to appeal should you not agree with the decision.

In case of their agreement to sell, the landlord’s response will include their offer as well as the following:

their asking price for the property
the amount of discount that they are willing to offer
a detailed description of the property along with any land that is part of it
details of any structural problems with the property or any service charges due

Can I Get A Discount On Purchasing A Council House?

Yes, if you are eligible for the Right To Buy scheme you will get a discount on purchasing a council house to a maximum limit of £84,000 across England (except for certain boroughs in London where it is £112,800). The amount keeps increasing with the rise in the rate of inflation every year.

The discount that you may avail yourself on purchasing a council house is primarily is based on the following factors:

The number of years that you’ve been a council housing tenant
Whether you intend to purchase a flat or a house
The monetary value of the property you intend to purchase

In the case of purchasing a council house, you may be able to get a 35 per cent discount; while in the case of a flat, it will be 50 per cent if you’ve lived in a council housing facility for between three to five years.

However, if you have applied under the Right To Acquire scheme, you will be able to get a discount of around £9,000 to £16,000 on the price of your property; depending upon where you live in the UK. This discount may reduce if you have previously applied under a Right To Buy or Right To Acquire scheme.

How Long After Buying A Council House Can You Sell It?

Although you can legally sell your council house anytime after the purchase and completion of documentation for transfer for ownership, however, if you sell it before the end of a five-year term, you will have to repay the discount that you availed under the Right to Buy Scheme.

Similarly, if you sell your council house before the end of a ten-year term, you will first have to offer it for sale to your council authorities or social housing landlord before you list the property for sale in the open market. If the landlord does not agree to buy the property or there is a conflict in the price that you offer versus the one they are willing to pay and there is no settlement between both the parties within 8 weeks, you can list your council house for sale in the open market.

If you intend to sell your council house after purchasing it, you may not be able to do so without foregoing the discount you availed through the Right To Buy scheme until you’ve lived in the property for a minimum of 5 years after the purchase.

This means that if you sell the property within the first year of purchasing it from the local council authorities or a social housing landlord, you will have to repay the entire amount of the discount that you availed during the purchase.

Can A Relative Buy My Council House For Me?

Yes, a relative can buy your council for you. However, to claim their name as the owner there are certain basic conditions to be met. These include the following:

The council house is the applicant’s main home
The property is self-contained
The applicant is a secure tenant
The applicant has had a public sector landlord for at least five years

Family members who have not lived with you for at least the past 12 months cannot apply to purchase a council house for you under the Right To Buy scheme.

While family members can fund the purchase of a council house, the legal ownership of the property will be in the name of the resident.

Conclusion:

The discussion here makes it pretty clear that not only can you rent out your council house after making a purchase, but there is also no waiting period involved due to which you can rent out your council house as soon as you buy it. In fact, according to some estimates, nearly 40 per cent of council property is rented out after it has been bought by tenants. On the other hand, according to an article that appeared on the BBC website, a total of 139 council homeowners who bought their property under the Right to Buy scheme ended up selling it within a month of the purchase; due to the profitable nature of the venture.

FAQs: Can I Buy My Council House And Rent It Out?

Is it illegal to rent a council house?

If you are a Secure Tenant at a council house, you can sublet rooms with the permission of your landlord. As long as the subletting does not overcrowd the property, there is no restriction on subletting. However, if you are on Introductory Tenancy and do not have the authority to sublet your council house, you may be evicted for such actions.