Voluntary Purchase Scheme for HA tenants

The implementation of changes to the Housing Act, has allowed all RSL's at their discretion to offer tenants the option to purchase their home under the Voluntary Purchase Scheme which came into effect on 18th January 2005.

While the scheme does not provide tenants with a statutory right to purchase, it will give some tenants who previously would not have been eligible under the right to acquire, the option to purchase their home at a discounted rate.

How the Scheme works

The scheme works on a very similar principle to the Right to Buy. Tenants of participating landlords will have the opportunity to buy their home at a discounted rate.

Eligibility

To meet the criteria, applicants must:

be a secure or assured (not assured shorthold) tenant of a registered social landlord living in self-contained accommodation qualifying for the scheme.
have been renting from a registered social landlord, local authority, or any other public sector landlord for a minimum period of two years which need not be continuous. If you have rented from the present landlord for less than two years your landlord will inform you whether any previous tenancies count.
not be an undischarged bankrupt or have a bankruptcy petition pending against you.
not be subject to a formal creditors agreement made under the Insolvency Acts.
not be required to vacate your property as a result of a court order for possession.
Where your landlord has helped you to stay in you home by buying your property and then renting it back to you.
You will need to have rented that property for 2 complete years before you can apply to take part in the scheme.
If you are currently in rent arrears, please note that your landlord may not agree to completing the sale before you clear the arrears.
A joint purchase will only be accepted where the purchaser is a member of your family or your partner, and has lived with you at the property you intend to purchase for the last twelve months. You may purchase the property with upto a maximum of three members of your family who live with you. The property must be their main residence.

Excluded Properties

Some properties may be excluded from the scheme including:

A rural settlement with 3,000 or fewer inhabitants.
A home leased temporarily by a registered social landlord from another landlord.
A home which is particularly suitable for elderly people and is let to be lived in by a person aged 60 or over.
Accommodation occupied by a tenant who is employed by the registered social landlord.
Your landlord may also decide to exclude other categories of property or may offer the scheme in particular locations.
Your landlord will tell you whether the home you live in is included in their scheme. If your home is not eligible, your landlord may offer you an alternative vacant property within its stock.

Property Valuation

Your Landlord will choose a qualified valuer who will decide a fair price for the property, a discount on that price will then be made available to the applicant. There is no right of appeal against the valuers decision.

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Maximum Discounts

At Present, discounts range between £9,000.00 and £16,000.00 depending on the area in which you live. Your landlord should be able to advise you of the current discount rate applicable to your area.

Selling your home

You may sell your home at anytime, however, if you sell within the first five years you may have to repay some or all of the discount you were given.

Selling in year one - you would be expected to repay 100% of the discount.
Selling in year two - you would be expected to repay 80% of the discount.
Selling in year three - you would be expected to repay 60% of the discount.
Selling in year four - you would be expected to repay 40% of the discount.
Selling in year five - you would be expected to repay 20% of the discount.

If you choose to sell within the first ten years, you must give your landlord the option to buy back the property from you, this is known as Right of First Refusal. If your landlord chooses not to purchase the property or you have owned it for more than ten years you are then free to sell your home on the open market.

Guide to the purchase process

Step 1 - applying for the voluntary purchase scheme

Contact your landlord - If there are sufficient funds available, your landlord will send you an application to purchase form on request. If not, your name will be held on a waiting list. On receipt of an application form your first step will be to complete and return it to your landlord. It is an important document and you should keep a copy for yourself.

Step 2 - your landlord?s response

The next step is for your landlord to reply in writing telling you whether or not you are eligible for the scheme. If you are not eligible, your landlord must tell you why. If you are eligible your landlord will give you in principle approval and send you an offer notice giving the value of your property, the discount available and the purchase price.

Step 3 - buying your property

If you accept the offer, you must:

arrange a mortgage, if you need one, with an approved lender (your landlord can provide you with a list of approved lenders)
appoint a legal representative to act on your behalf.
if you require a survey, arrange for this to be carried out at your own expense.
complete and sign the application to purchase form provided by your landlord.

Next, you must send to your landlord:

details of your mortgage offer or evidence of sufficient savings to purchase.
any other information requested by them.

Step 4 - your landlords approval

Once your landlord has examined all the details you will be told when you may complete your purchase.

Step 5 - completing your purchase

Once your landlord has given approval, you will proceed to completion, and your legal representative will advise you on the legal documents and making payments.

Other Information

It is expected that completion of your purchase should take place within six months from your landlord approving the purchase of the property you have agreed to buy. If you expect a longer delay in completing the purchase, you should inform your landlord as soon as possible.