Increase in queries about right to buy

Advisers on our helpline are reporting an increase in calls about social housing tenants' right to buy their homes. This includes calls from lending institutions, who are also fielding multiple calls about the house sales scheme. It's likely that this buzz of activity has been spurred by speculation over the future of this scheme. 

Last year, the Department for Communities launched a consultation on the future of the house sales scheme, necessitated by the 2016 ONS ruling that housing associations should be considered public bodies.  This ONS ruling  has caused significant concern for the housing movement, as it is thought to impeded housing associations' ability to leverage private funding to meet building targets and shifts significant amounts of debt over to the public balance sheet. The existence of the house sales scheme was a key consideration by the ONS in reaching this ruling, and the ruling can only be overturned if this scheme is reviewed. The Department's consultation document outlined three options, with the preferred option being to end the house sales scheme for both Housing Executive and housing association tenants in Northern Ireland. 

Current position

With the collapse of the Assembly, little has progressed in this regard since 2016. A derogation was put in place to postpone the reclassification of housing associations, but this was scheduled to expire earlier this year. Inside Housing reported that the Northern Ireland Office intended to legislate to ensure that housing associations weren't reclassified, but there has been no further developments in this regard. At the moment, social housing tenants who have held a tenancy for at least five years can still apply to buy their homes. The Department for Communities consultation stated that any legislation brought forward to end the house sales scheme would include a temporary extension to the scheme to allow existing tenants to exercise their right to buy within a certain time frame.

Get advice before taking action

Meanwhile, local businesses appear to have been encouraging tenants to exercise their right to buy, while they still can, with some people contacting Housing Rights in response to leaflets dropped through their letterboxes. Similar tactics led to many people exercising their right to buy in the years running up to the economic crash in the late 2000s, and Housing Rights represented many tenants in repossession hearings who now faced the prospect of losing the home they had lived in for so long, but who would have been able to stay in the property had they remained as tenants.

While the right to buy is a great way into home-ownership, it's also important to understand the down sides of buying a property. The most significant changes a tenant will notice if they buy their home are

• they will get very little assistance with mortgage costs if they cannot work; the help that is available will only pay part of the mortgage, will have to be paid back to government when the house is sold and will only kick in after 9 months on benefits, leaving significant arrears for most people
• they will become responsible for all repairs on the property (even if they only buy a share in it) and may have to pay regular service charges or portion of block maintenance work (such as repairs to communal areas)
• there are additional costs associated with homeownership, with most mortgage lenders requiring that you take out life insurance and buildings insurance policies.

Tenants who exercise their right to buy are usually entitled to a discount on the purchase price. This discount will have to be repaid if the property is sold within the first five years after the purchase, although there are some exceptions to this rule. 

Finding out more about the right to buy

Our HousingadviceNI website includes some information to explain the right to buy in more detail. Tenants who are considering this option should speak to our helpline advisers.