Right to Buy

Repaying your discount

If you bought your home under the Right to Buy and sell it during the discount repayment period, five years from the date you bought your home, you will have to repay all or part of the discount. The amount you must repay if you sell your home within this time will be a percentage of the value you sell your home for. If you sell your home within the first year, you must repay the full discount. If you sell your home within the second year, you must repay four-fifths of the discount and so on.

If you are selling your home in the discount repayment period, and want advice on how much discount you will need to repay, contact the Home Ownership Team.  The Government has given guidelines on situations where the repayment of discount can be exempt in certain situations.  

Postponement of charge 

Applicable if you decide to remortgage within the first 5 years after your Right to buy. 

• If you bought your property through Right to Buy, the repayment of the discount you were given will have been secured by a legal charge against your property. If you bought with a mortgage, the lender will also have secured the money it has loaned you through a legal charge on your property. 
• If you want to remortgage your property or get another secured loan during thefive year discount repayment period, it is likely that your mortgage company will want you to get a postponement of charge. This means your remortgage or new loan takes priority over repaying the Right to Buy discount.
• The council can exercise discretion to agree to your request to postpone our charge in certain circumstances.  For us to agree to a postponement of charge your loan must be for an approved purpose as specified in Section 156 of the Housing Act 1985 (as amended by Section 120 Leasehold Reform, Housing and Urban Development Act 1993):
  • Carry out work to your property or to make improvements
  • Pay your service charge (including major works and buildings insurance)
  • Remortgage to change mortgage companies and reduce your mortgage lending
  • Take out a loan to repay other loans secured against the property to pay interest owed on a mortgage or remortgage

If the request is being made:

• During the Right to Buy application process, you will need a letter of postponement
• Within the 5 year discount repayment period (but after completing Right to Buy), you will need a deed of postponement.

If you took out a mortgage to buy your home under Right to Buy, Welwyn Hatfield Borough Council’s interest is registered as a second charge and in the event the property is repossessed the repayment of the mortgage would take priority. The letter or deed of postponement would require the council to reduce its interest in the property to a third charge.

We will only agree to a postponement of charge in the following circumstances:

• A formal request is made.
• The applicant provides evidence for what the money will be used for such as proper estimates/invoices.
• If the application is for home improvements, we can inspect any home improvements within six months of the work being completed.
• The applicant pays the current administration fee.

Letters or deeds will not be approved for kitchen appliances, garden, landscaping, conservatories or any other alteration prohibited by the lease.

If you would like to request a postponement of charge please contact us.