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Chapter 4: Exercising the Right to Buy
Purchasers generally found the process of purchasing a property through Right to Buy to be straightforward, although some had been concerned about the process before it began. Purchasers had varying levels of help through the process. Respondents' experiences of exercising the Right to Buy are detailed below.
Purchasers' experience of the Right to Buy Process
Those who bought their council house under the Right to Buy varied in the level of detail they remembered about the process. Those who purchased in the last 5-10 years often offered more detailed information.
The length of time of the purchase, from initial enquiry to completion, varied from less than six months to up to a year and a half. For most, the process was completed in less than 6 months. Only one respondent, a woman from Edinburgh, said that it took more than one year, although there was no obvious explanation for the delay in the purchase process. Only one or two respondents thought that the process had taken too long.
Many respondents remembered contacting the council either to ask about the process, or to request an application form, and for most this was the first step in the process. Many purchasers then remembered a surveyor coming to their house to conduct a valuation. After this, some explained that they received a letter from the council detailing the price at which they could buy the house, and the discount that they would receive. A small number remembered that they then had a set time in which to decide whether they wished to purchase the property or not, however the length of time recalled varied from 1 month to a year.
Respondents described what forms of help and assistance they had received during the process. Most remember having some contact with solicitors during the purchase process, although the level of help given by the solicitors varied greatly. Some were used purely to fulfil the legal requirements, whereas others described their solicitor as dealing with " everything" after they received the offer from the council.
Other sources of help included the council itself, mortgage advice centres, financial advisors and advice centres set up specifically for those wishing to purchase their council property. The level of help provided by these sources also varied. One couple, who live in Edinburgh, remembered that the council sent them a list of relevant solicitors. One respondent from Edinburgh thought that the council had handled everything once he completed the application form.
"And then they did all the processing work on that. You didn't have to get a lawyer, they did it all from their end."
Right to Buy purchaser who subsequently sold their Right to Buy property, Edinburgh, Interview 03.
A small number of respondents spoke to advisors in advice centres set up specifically for those wishing to purchase their council property before they had any contact with the council. These advisors appeared to be instrumental in the purchase process, explaining the long-term benefits of buying compared with renting and explaining the costs involved in buying. For one woman in Edinburgh who went to an advice centre, this advice may have given her the confidence to start the process. She explained that initially she had thought buying was a big step and had worried about the risks. However, with the reassurance offered by the advisor, she decided to purchase her council flat.
"We'd always been a bit scared to buy. We'd been married at that time for a good long number of years, but we'd always been scared to buy because we're working class people and our parents hadn't purchased their homes and it was a big step. We thought 'What if you lost your job?'."
Right to Buy purchaser still in purchased home, Edinburgh, Interview 01.
Those who remember using an advisor or a solicitor generally said that it took only a short amount of time; 6 months or less. Those who did not mention using an advisor or solicitor cited various time spans; from six months to a year and a half.
Two respondents suggested that the Council were responsible for the slowness of the process. In one case a man from Aberdeen considered this to be due to problems agreeing what repairs the council should undertake before he purchased his flat.
"As I say, within about a year everything was signed and sealed. There was a lot of back and forth with [the council], getting this confirmed and there were the problems of agreeing the things the council should do before we went ahead and bought it." (07)
Right to Buy purchaser still in purchased home, Aberdeen, Interview 07.
Financing the Right to Buy
Mortgages were the main source for financing the purchase of council properties. In some cases, the mortgage also covered other costs such as solicitors', or advisors' fees. Personal savings were rarely used. When used, these only formed part for the payment, alongside a mortgage. A woman from Edinburgh explained that she had had to get a job to supplement her husband's income. After a year they had raised enough money for the deposit. Another woman from Edinburgh explained that she could not afford to buy when she initially heard about Right to Buy, as she had no savings for a deposit. It was not until 2 or 3 years later when she was left money from her grandfather's will, that she was able to afford the deposit for her terraced house. Indeed this money was the driving factor of her decision to purchase.
"Really when I got the money from my grandparents' estate I said let's go for it because we wouldn't normally be able to get onto the property market."
Right to Buy purchaser still in purchased home, Edinburgh, Interview 43.
Banks or other mortgage providers generally provided mortgages for these purchasers. Only one respondent specifically mentioned using a mortgage arranged through the council. This woman from Edinburgh, who subsequently sold her Right to Buy house, received a 100% mortgage with the council, which she described as " extremely good". On the other hand, a council tenant from Aberdeen, who had withdrawn his application when he lost his job, thought that the APR on the council's mortgage was higher than the loan he had been offered.
In a small number of cases, cash was used to finance the whole purchase. These purchases were not funded by the tenants themselves, but by their children. For example a man in rural Perthshire explained that he had purchased his mother-in-law's council house for her, although the purchase was made in his name. A woman from rural Perthshire was given the money to purchase the house by her son. In this case the purchase was made in her name, although he would inherit the house when she dies.
A few respondents, including two tenants who withdrew their application, experienced difficulties financing the purchase of their council property. Specifically, there were a number of reasons given for difficulties securing a mortgage. Two older purchasers were unable to get a mortgage that would allow them to repay the cost of the house due to their age. Instead they were offered an interest only mortgage, which they accepted. A man from Inverness had difficulty finding a lender who would give him a mortgage due to the non-traditional construction of the house.
Interestingly no one mentioned any problems keeping up with mortgage repayments. One couple who purchased their flat in Edinburgh explained that even when the husband lost his job, they still continued to keep up with the repayments. This had been one of their biggest fears when they had considered purchasing.
"Even though my husband did lose his job, at one point, we still somehow managed to keep it going and we never missed a payment."
Right to Buy purchaser still in purchased home, Edinburgh, Interview 01.
Reasons for the withdrawal of Right to Buy applications
Only five respondents interviewed had withdrawn an application to purchase their council house. Two of these went on to buy the property at a later date and another was in the process of applying again.
Often the main reason for withdrawing the application was the cost; either the valuation of the property price was more than expected, or the monthly cost of repaying the mortgage offered was more than the respondent had been able to afford. For example, a retired man from Govan described how he applied to buy his flat after his neighbour bought his. When he filled in his Right to Buy application form he was given the choice of surveyors; either a " district" or a " local" surveyor. He chose the latter. When his valuation came through it was significantly higher than the valuation his neighbour had received for his similar property. After discussing the apparent discrepancy with his neighbour, he decided that it was due to the surveyor he chose. He withdrew his application and reapplied the next year, with the "district" surveyor. The valuation was reduced by £1,000.
Another respondent in Govan put in an application after discussion with her daughter-in-law. This retired woman wished to purchase the property using only her savings; however the valuation was more than she could afford to pay. Although her daughter-in-law offered to help finance the purchase, she was unwilling to go ahead with the purchase unless she could buy the house entirely with her own savings. The respondent implied that her daughter-in-law was the driving force and that she was not really that keen to purchase in the first place. The application was withdrawn.
"It doesn't bother me either way. I know all the legal side of it, that if I bought it I'd be able to leave my grandchildren with a sum of money, I know all that, but that doesn't sway me."
Tenant with the preserved Right to Buy, Glasgow, Interview 33.
A woman from Stirlingshire withdrew her application when she realised that the monthly payments for the only mortgage she could get would be too expensive. A man from Aberdeen applied to exercise his Right to Buy, but then lost his job, so would not be able to afford the mortgage repayments. He planned to reapply to purchase his house in the near future.
Only one respondent withdrew an application for reasons not related to finance. In this case, a couple from rural Perthshire applied for the Right to Buy, but then decided that the house was slightly too large and that they were not really happy with it. They withdrew the application and tried to get an exchange to a smaller property, with a view to buying this instead. When they were unable to get a suitable exchange, they reapplied and purchased the house.
Overall views on Right to Buy process
Respondents who had exercised their Right to Buy generally reported that the process of purchasing a council house had been "straightforward". These respondents rarely elaborated on their experiences of the process in any detail and it was apparent that they had not found it particularly stressful.
A number of respondents had only vague recollections of the process, due to the time that had elapsed since they purchased their home. This vagueness might have lead to experiences of the Right to Buy process being reported in simplified form. For example, a woman from Edinburgh who purchased her house in 1974 3 commented:
"It didn't seem to be difficult process. I don't remember any major hiccoughs or people coming and going. I don't think there were any problems about it at all."
Right to Buy purchaser who subsequently sold their Right to Buy property, Edinburgh, Interview 53
Some respondents mentioned negative aspects of the purchase. As explained earlier, a few found the process a little slow and others had difficulty financing the purchase, or paying solicitors fees. However, as often as not, these respondents reported that the purchase itself was simple and straightforward.
For some purchasing a house seemed to be a big step psychologically. A woman from Edinburgh explained that the process was stressful as she had never done it before. She hoped that she was " doing the right thing" and that she could afford it.
"You've never been down that road before and you're not sure what it involves. You're a bit stressed in case it doesn't all come to fruition. You're a bit stressed because you're wondering if you've done the right thing and if you're going to be able to afford it. You've got a 25 year burden around your neck."
Right to Buy purchaser still in purchased home, Edinburgh, Interview 18.
Two respondents decided to purchase their houses despite feeling that the properties were not suitable. In both instances they had first applied for exchanges, however did not get offered suitable properties and therefore decided to proceed with the purchase of their existing homes. Indeed, a Council Housing Officer advised a woman from Stirlingshire that the only way she would be able to move to a more suitable property was to purchase her council property. This added to the stress of the process, as there was an element of doubt.
"I had my reservations and didn't want to buy this."
Right to Buy purchaser still in purchased home, rural Stirlingshire, Interview 26.
Those with a family history of home ownership had generally been happy with the purchase process, and seemed less likely to have found it stressful. Where solicitors, advisors or the council handled the process, respondents were often positive about the process.
Purchasers who had subsequently sold the home they purchased under Right to Buy were generally happy with the purchase process. Indeed only one respondent mentioned any negative aspect; the length of time for the process. It seems possible that the ease of the process of exercising their Right to Buy had given them the confidence to subsequently sell and buy on the open market.
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