Everything about a Right to Buy purchase follows from one number: what your landlord says the property is worth. Your discount is a percentage of that figure, the cash cap is measured against it, and your mortgage is sized by it. It is worth understanding how the number is arrived at before you receive it.
Who decides what your council house is worth?
Your landlord does, using an independent valuation. Once you have applied and your landlord has confirmed you have the Right to Buy, they instruct a qualified valuer, usually a RICS surveyor, to assess the property's open market value.
The valuation is of the property as it stands on the date of your application, sold with vacant possession on the open market. It is not what you paid in rent, not the council's build cost, and not what the property might be worth after work you plan to do.
Your landlord then sends you a formal offer notice, generally within eight weeks for a house or twelve weeks for a flat, setting out the valuation, the discount and the price you would pay.
How the valuation is worked out
The valuer looks at recent sale prices of comparable properties nearby, then adjusts for the things that make yours different: size and number of bedrooms, condition, the state of the kitchen and bathroom, whether it is a house, maisonette or flat, the floor it is on, parking, garden, and for flats the length of the lease and the level of service charge.
Two adjustments matter particularly on ex council stock. Construction type is one: concrete and system built properties can value lower because fewer lenders will lend on them. The other is the mix of the block or street. A flat in a block that is mostly still rented will usually value below an identical flat in a block that is mostly owner occupied.
Can I estimate it online?
You can get a rough idea, and it is worth doing before you apply so nothing comes as a surprise.
Start with the Land Registry Price Paid data and the sold prices on the main property portals, and look for genuine comparables: the same street or estate, the same property type, the same number of bedrooms, sold in the last six to twelve months. Automated valuation tools are a reasonable sense check but they handle ex local authority property poorly, so treat anything they produce as a wide range rather than a figure.
Then use our Right to Buy discount calculator to see what that value would mean for your discount and your purchase price.
Improvements you have paid for
This is the part tenants most often miss. If you have paid for qualifying improvements yourself, a new kitchen, a bathroom, double glazing, central heating, an extension, the valuer should disregard the value those improvements have added. You should not be asked to buy back your own work.
Make sure the valuer knows. Tell your landlord in writing what you have done and when, and have receipts, invoices or photographs ready. If the improvements are not flagged, they will simply be valued as part of the property.
What if you think the valuation is too high?
You have the right to challenge it. If you disagree with the figure in your offer notice, you can ask for a determination of value by the district valuer, who is an independent valuer from the Valuation Office Agency. You normally have three months from receiving the offer notice to ask for this.
Two things to know before you do. The district valuer's decision is binding on both you and your landlord, and the figure can go up as well as down. So build your case first: gather comparable sold prices, evidence of any defect or disrepair, evidence of your own improvements, and for a flat the service charge history.
From valuation to your actual price
Your discount is a percentage of the valuation, and it depends on how long you have been a public sector tenant. Under the current rules that is 35% for a house or 50% for a flat once you have three years behind you, rising by 1% a year for houses and 2% a year for flats after five years.
Two ceilings then apply, whichever bites first: the discount cannot exceed 70% of the property's value, and it cannot exceed the regional cash cap, currently £34,000 across the East of England. So a Suffolk house valued at £180,000 with a 35% entitlement would give £63,000 on the percentage, but the cash cap brings that down to £34,000, and the price you pay is £146,000.
The cost floor rule can reduce it further. If your landlord has spent money building, buying, repairing or maintaining the property within the last 30 years, your discount may be cut or removed. Ask about this early.
Your lender will value it too
Your mortgage lender runs its own valuation and lends against the lower of its figure or the purchase price. Because you are buying at a discount, the lender's valuation is usually comfortably above the price, which is what allows most Right to Buy purchases to proceed with the discount standing in for a deposit. Occasionally the lender's valuer takes a different view of the property, and that is when a case needs reworking. Our page on Right to Buy mortgage lenders explains how lenders approach these purchases.
We advise on Right to Buy from our offices in Ipswich, Felixstowe and Haverhill. If you have had your offer notice and want to know what it means in practice, the first conversation is free and there is no obligation.
Valuation and discount rules are set by government and can change. Always confirm the current position with your landlord before you rely on it.
Your home may be repossessed if you do not keep up repayments on your mortgage.