Voluntary Right to Buy FAQs
- What is the Voluntary Right to Buy?
The 2015 Conservative Party manifesto pledged to extend the Right to Buy to people living in housing association properties. The Government tested the principles of the scheme between January 2016 and July 2017 with a small pilot. A large-scale regional pilot of the VRTB was announced by Government in the Autumn Budget 2017. It was confirmed that the pilot would take place in the Midlands, starting at some point in 2018. The pilot will provide more information to housing associations and the Government before the scheme may be launched nationwide.
- Why is it called ‘Voluntary’?
In October 2015, the Government accepted a proposal put forward by the National Housing Federation (the trade body for housing associations), on behalf of its members, to deliver its commitment to extend the Right to Buy to housing association tenants by way of a voluntary agreement rather than legislation. This has come to be known as the Voluntary Right to Buy (VRTB). The Housing and Planning Act 2016 only enacted what was necessary to enable the Secretary of State to underpin the agreement.
- When will the Voluntary Right to Buy pilot start?
The pilot starts on 16 August 2018, for a period of 2 years.
- Why is the scheme run as a ballot?
With only limited government funding available to reimburse housing associations for the discount, not everyone eligible will be able to purchase under the scheme. A ballot has been judged to be the fairest way to run the scheme in the light of limited funding.
Other reasons for running a ballot system are to ensure accessibility for customers without internet access at home, or who require assistance with access. That way it provides more time for customers to put such arrangements in place.
- What is a ‘unique reference number’ (URN) and how do I get one?
Before you apply to Orbit for the Voluntary Right to Buy, you must obtain an URN from the Government’s ‘Digital Gateway’ website.
The URN is allocated by Government. Customers have to apply on the Government website to be entered in to a ballot whereby, once the ballot has closed on 16 September, the Government will allocate URNs to customers on a random basis.
The Government will notify you to let you know if you have been successful in being allocated an URN. If you are successful you can apply through Orbit’s website, providing us with your URN. You will need to apply within four weeks of receiving your URN. If unsuccessful in the ballot you will not be able to apply for the Voluntary Right to Buy.
- What if I am unsuccessful in obtaining a unique reference number?
- I don’t live in the Midlands. Is the Voluntary Right to Buy available in other regions?
The pilot is confined to the Midlands region only, so the Voluntary Right to Buy will not be available anywhere else. For the precise geographical coverage of the pilot click here.
- Am I eligible?
You are eligible for the scheme if you:
- have been a social tenant for at least 3 yearsand have lived in your current home for at least 12 months. If you only have been with Orbit 1 year but with a different social landlord (council or housing association) for a further 2 years, your total tenancy length will equal 3 years and you will qualify
- currently hold an un-demoted secure tenancy, an assured tenancy, or a fixed-term tenancy
- have the right to reside in the UK and can demonstrate that immigration status checks are met
You are ineligible for the scheme if you:
- already have the Preserved Right to Buy or Statuary Right to Buy. You can find more details about those schemes on our website
- have a fixed-term tenancy for less than 2 years, or are have an assured shorthold periodic tenancy.
- have an assured fixed-term tenancy where the original term is longer than 21 years
- are an assured tenant in shared housing
- are a shared owner
- live in designated housing for older people, supported housing, or housing for people with disabilities
- occupy only a room in a shared house or flat
- have any rent arrears at any point during your application
- have legal issues with debt
- are currently subject to the mortgage rescue scheme
- are a resident of almshouses or co-operative housing associations
- have committed anti-social behaviour, and Orbit has initiated legal proceedings as a result of this
- are subject to legal proceedings, such as injunction proceedings or a notice of seeking possession
- already own a property at the point of application
For further details see our Voluntary Right to Buy policy
- Can I make a joint application?
Yes, you can apply with up to 3 family members. They will also have to demonstrate that the home is their main home and has been their main residence for at least the last 12 months. In addition, joint applicants will also need to demonstrate that they have the right to reside in the UK and meet immigration status checks. No joint applicant can be added or removed from the application during the process without voiding the application. Also in the case where any of the joint applicants is ineligible this will void the application. Joint applicants subject to bankruptcy proceedings or unfilled credit arrangements are also ineligible.
- How much discount will I be entitled to?
The discount is calculated on the following basis:
- for each complete year of confirmed tenancy, you are entitled to receive a discount based on a percentage of the open market value of the property. The total periods of qualifying tenancy are added together (years, months, days) and the discount is calculated on the total years. The monetary value of this percentage is then deducted from the market valuation of the property
- for freehold sales you will receive a 35% discount for the first 5 years and a further 1% for each additional complete year of confirmed tenancy, up to a maximum of a 70% discount – or £80,900 whichever is lower
- for leasehold sales you will receive a 50% discount for the first 5 years and a further 2% for each additional complete year of confirmed tenancy, up to a maximum of 70% – or £80,900, whichever is lower
- if you have previously received funding under the Right to Buy, Preserved Right to Buy or Right to Acquire, the discount will be reduced by the amount previously received
Ms Smith has been a housing association tenant for 11 years. Her 3 bedroom house in Coventry has been valued at £300,000. She has previously received £16,000 under the Right to Acquire for a property she no longer owns.
35% (5 years) + 1% x 6(years) = 41%
41% x £300,000 = £123,000
Maximum discount = £80,900
Maximum discount £80,900 – deductions £16,000 = £64,900
The Government will pay a discount of £64,900 and Ms X will pay £235,100. Orbit receives £300,000 market value.
- Does my property qualify for the Voluntary Right to Buy?
Housing associations have discretion to exempt properties from the Voluntary Right to Buy. Our Voluntary Right to Buy Property Exclusions Policy sets out our exemption criteria and the reasons for it.
To find out whether your home is exempt from the Voluntary Right to Buy, fill in your details in our property eligibility checker.
Where the property is exempt from the Voluntary Right to Buy you will have the choice of buying an alternative property, subject to availability, and we will offer you a list of alternative propertiesavailable to purchase. This is known as ‘portability’. Details can be found in the ‘Voluntary Right to Buy Portable Discount Policy’. The discount is based on the alternative property you are purchasing.
- How long can I expect the process from applying to completion last?
The process to buying your home could take up to 11 months; however it might take longer if you go down the ‘portability’ route.
Your customer journey to buy your home will be as follows:
- Register in the ballot to obtain a unique reference number from the Government’s Digital Gateway. The ballot will be open for one month, closing on 16 September 2018
- Complete our customer and property eligibility checker.
- Complete the Orbit application form, provided you have obtained a unique reference number. You will need to apply to us within four weeks of receiving your ‘unique reference number’.
- Pay the £250 application fee (refundable to you upon sale of the property)
- Orbit will carry out eligibility checks
- Attend a face-to-face interview at our Stratford-upon-Avon office. Any joint applicant(s) must be present
- A RICS qualified surveyor will value the property
- Orbit will issue a formal offer of sale to you detailing the sale price and discount
- You accept the formal offer
- The conveyancing process begins
- You successfully purchase your property
- You will receive a refund of the £250 application fee
- I am a shared owner. Am I eligible to buy my home under the Voluntary Right to Buy?
The Voluntary Right to Buy is not open to customers who own a property under Shared Ownership. To purchase your Shared Ownership property outright you must contact Orbit’s Home Ownership Services team to enquire about buying more shares in your property.
- Where can I find out more?
Your local Citizens Advice Bureau for legal advice