Incremental Tenant Purchase Scheme
In January 2016 a new Tenant (Incremental) Purchase scheme for the purchase of existing Local Authority houses came into effect.
If you are a local authority tenant living in a local authority house, that is available for sale under the scheme and you meet the eligibility criteria, you can apply to purchase your house. Further information can be found here.
However, there are a number of types and uses of houses not eligible under the scheme, such as
- Apartments, (a separate purchase scheme for apartments applies)
- Houses that have been specifically designed for occupation by elderly persons
- Houses that have been specifically designed in a group setting for occupation by members of the travelling community and
- Houses in a private development transferred to the local authority by the developer
- If you are a local authority tenant living in a local authority house included in the scheme you can apply to buy the house. You must however be in receipt of some form of social housing support for at least 10 years, and must have a minimum gross annual income, as determined by the local authority, in accordance with the rules of the scheme.
- You will pay the market value of the house – less a discount.
- Depending on income, the discounts will vary between 40% and 60%.
- Your local authority will also place a charge on your house called an ‘incremental purchase charge’. This charge will be equal to the discount you get on the price of the house.
- The charge will remain in place for 20, 25 or 30 years (depending on the discount given).
- Each year, the local authority will reduce the charge by 2%. At the end of the 20, 25 or 30 years, the charge will be zero as long as you obey the terms and conditions of the scheme.
- You must live in the house as your normal place of residence and get agreement from your local authority if you want to sell, let or sub-let the house.
- You will be able to resell your house at any time if your local authority agrees. However, if you sell before the end of the 20, 25 or 30 years, you will have to pay back the value of the outstanding charge on your house to your local authority.
- Like all homeowners, you will be responsible for maintaining and carrying out repairs on your house from the date you buy it. You will also have to get and keep adequate property insurance on your house – and pay for this yourself.
- The local authority can refuse to sell the house in particular circumstances such as to tenants or household members involved in anti-social behaviour or with rent arrears.
- The Housing (Sale of Local Authority Houses) Regulations 2015, as amended by the Housing(Sale of Local authority houses)(Amendment)Regulations 2021, sets out the conditions for the sale of local authority houses.