The Right to Acquire scheme allows tenants in housing association homes to buy the property they are renting (at a discount).
Following the updated Housing Act 2004, tenants can start the application process once they have had a public sector landlord for at least three (3) years.
Typical examples of public sector landlords include:
Note: You can inform your landlord that you plan on buying your housing association home by giving notice of intention to claim the Right to Acquire (RTA1 form).
Properties that Qualify for Right to Acquire
There are some key differences between the ‘Right to Acquire’ and the ‘Right to Buy‘ schemes. But, the property will only be eligible for the RTA scheme if it was (either):
- Constructed (or bought) by a housing association after the 31st of March 1997 (and have been funded through a social housing grant provided by the Housing Corporation or local council).
- Transferred to a housing association from a local council after the 31st of March 1997.
The housing association home that you want to buy through the government initiative must also be (both):
- Your only home (or the one you live in most).
Furthermore, the landlord must be listed with the registered providers of social housing (e.g. Regulator of Social Housing).
You will not qualify for Right to Acquire if:
- You get written notice that the housing association has started eviction proceedings (e.g. a court has issued a possession order).
- Someone has applied to make you bankrupt (or you are applying to become bankrupt yourself).
- You have ‘Preserved Right to Buy‘ or you are a council tenant (check if the right to buy your council home is available instead).
Note: Joint applications will only apply to people who share the tenancy or up to three (3) family members living together for the past twelve (12) months (even if they are not sharing the tenancy).
Right to Acquire Discount
Currently, the Right to Acquire discount 2022 is a unitary amount between £9,000 (e.g. in Derby) and £16,000 (e.g. in Surrey). Your landlord will confirm how much money you can save on the price of your property.
The exact amount of discount that you can get depends on which area of the United Kingdom you are living, and which county council you fall under. You can find a complete list of Right to Acquire discounts by location on the GOV.UK website.
Important: If you already used ‘Right to Acquire’ or the ‘Right to Buy’ your council house scheme, it may reduce the total discount that you can get.
Right to Acquire Application Process
- The first step is to fill in the RTA application form (see the link above) and then send it to your public sector landlord.
- Landlords must give their tenants an answer within four (4) weeks of getting an application (eight weeks if they have been renting for less than 3 years). Even though you cannot appeal against their decision, the landlord must provide a reason if they respond with a refusal.
- Landlords would need to send an offer to their tenant if they agree to sell the property. The tenant must receive the offer within eight (8) weeks of acceptance for freehold properties (twelve weeks for leasehold properties).
Note: In some cases, landlords may offer tenants a choice of buying the home they are living in or one of the other empty homes that they own. Nonetheless, tenants do not have to accept any of the other properties offered to them for the purchase.
If Your Landlord Agrees to Sell
The landlord’s offer will inform you about some important information relating to the sale, including:
- A full description of the property and any land included in the transaction (and any known problems about the structure, such as issues with subsidence.).
- The price (e.g. how they calculated it) and how much discount applies to the sale (e.g. how they worked it out).
- Estimates of any service charges that may apply for the first five (5) years (e.g. for flats and maisonettes).
Responding to the Landlord’s Offer
Tenants have a period of twelve (12) weeks to respond to the offer given to them by their landlord. Hence, they should confirm that they want to go ahead with the purchase.
Your landlord will send you a reminder letter (RTA4) if you fail to confirm the sale. The RTA4 gives you further time to tell them that you still want to buy (at least four weeks). The ‘RTA5’ is a final reminder. Failing to respond to this letter means the landlord can stop the application to buy your housing association home.
Important: Tenants can choose to withdraw from the sale at any time and then continue renting the property under the same terms as before.
Disagreeing with Your Landlord’s Offer
You should contact your landlord and tell them if you disagree with the offer that they gave you (including your reasons for not agreeing).
What if you feel your landlord set the market value of your home too high? If so, you must get an independent valuation (by writing to your landlord within three months of receiving their offer).
HM Revenue and Customs would send a district valuer to the property to determine its market value. Tenants would then have a further twelve (12) weeks to either accept the valuation made by HMRC or to withdraw from the sale.
If You Want to Sell Your Home
After buying your home through Right to Acquire, you would need to offer it to the same landlord if you decide to sell it within ten (10) years.
The selling price for the property should be the full market valuation and agreed between the landlord and the tenant.
A district valuer would determine how much the property is worth if you are unable to agree. There would be no charge for getting the independent valuation.
Important: Tenants can sell the home to anyone if the landlord fails to agree to buy it within eight (8) weeks.
Paying Back Right to Acquire Discounts
Selling your housing association home within five (5) years of buying it means you would need to pay back some of the discount you received (or all of it in some cases).
You would need to pay back all the discount if you sell your home within the first year. Furthermore, there may be extra charges depending on the value of the property when it’s sold (e.g. a 10% discount would mean having to pay back 10% of the selling price).
However, selling your home after the first year would result in a reduction for the total amount that you would need to pay back:
- 80% of the discount if you sell in the second year
- 60% of the discount if you sell in the third year
- 40% of the discount if you sell in the fourth year
- 20% of the discount if you sell in the fifth year
Let’s say your home was worth £100,000 when you bought it and you received a 10% discount when buying it through the Right to Acquire scheme (i.e. £10,000).
You decided to sell your home after a period of eighteen months for a selling price of £120,000. Selling it in the second year means you would need to repay 80% of £12,000 (i.e. £9,600).
Expert Help and Advice
Some of the organisations that offer free advice about the Right to Acquire scheme include: