Council tenants may face curbs on buying homes

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The Independent Online

Council house tenants may have less than a year to exercise the right to buy their properties before new restrictions are put in place, according to a leading mortgage broker.

Council house tenants may have less than a year to exercise the right to buy their properties before new restrictions are put in place, according to a leading mortgage broker.

Jim White of Jim White's Mortgage Solutions said: "These restrictions will catch a lot of people unawares and it could cost them dearly. Councils could claw back £15,200 if they move within four years, so local authority tenants who can afford to buy their property should seriously think about doing so before next February."

Under the new Housing Bill, which is expected to be in force by next March, council tenants will have to occupy their property for five years rather than the current two years before they can exercise their right to buy at a discount.

The new law also means that, once they do buy their home, if the homeowner has to move within five years of purchasing they will have to repay some of the discount and any increase in the value of the property. At present new homeowners have to stay in their homes for only two years.

Since 1980, when the Thatcher government introduced right-to-buy, 1.55 million tenants have taken up the right.

Mr White said: "A lot of local authority tenants are shunned by mainstream lenders because their credit history might not be fully established: for example, they may have only recently paid back debts after a period of unemployment. However, there are many specialist lenders who will lend to people with impaired credit histories at competitive terms, and require no deposit on right-to-buy purchases. Up to 100 per cent of the discounted purchase price can be borrowed."

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