A tenant's guide- The Right to Buy
Buying a flat or maisonette: what are the differences from buying a house?
If you buy a house, you will purchase the freehold and will own the property outright. If you buy a flat or maisonette, you will usually purchase a long lease. This allows you and your successors to live in it for a fixed time, usually 125 years. The block will still be owned by the council, and the council will be responsible for the upkeep of the building as a whole and of any communal areas and facilities.
As a leaseholder, you only have to pay the council a nominal rent (known as a 'ground rent') of £10 a year. But you and other leaseholders will also have to pay service charges to the council. These can be perhaps several hundred pounds each year, or much more if the block needs major repairs or maintenance, such as a new roof or new windows, and improvements.
Leaseholders can sell their properties at any point during the lifetime of the lease. The person who buys it pays to take over the remainder of the lease. So if you buy your home on a 125-year lease, and sell it after 15 years, the buyer will get a 110-year lease.
Under your lease
- the Council will be responsible for repairing the structure and outside of your flat and the rest of the building. This includes routine repairs and maintenance, and also major maintenance and refurbishment works, repairing the roof for example, which can be expensive.
- The council may provide services like communal lighting, and cleaning staircases and passageways, and perhaps supplying hot water to your flat.
- You will have to pay a reasonable share of the costs for these works and services. Your share is determined by the number of flats or maisonettes in the block.
- You will also have to pay a contribution towards the costs incurred by the council in managing the block.
- You will also be responsible for keeping the inside of your flat in good repair
Your share of the council's costs is known as a service charge. There are two kinds of service charges:
- annual charges for ground rent, insurance, management costs and day-to-day maintenance.
- 'major works' service charges when major repair or refurbishment work is needed.
If you decide you want to buy, the council must tell you how much the property will cost and must also give you an estimate of any service charge you will have to pay during the first 5 years of your lease. Once you have been given an estimate, the council is not allowed to charge you more than that figure during the first 5 years of your lease, except to take account of inflation.
There is no special limit on charges for repairs carried out after the first 5 years. You need to remember that you may have to pay 'major works' service charges whenever your block is repaired. There are several schemes to help you with this - and you should contact the Housing Management Department to find out about any such schemes.
Some freeholders (i.e. if your home is a house rather than a flat) may also have to pay service charges for the repair and maintenance of shared communal areas on an estate - for example, pathways, play areas and gardens.
Other points on service charges
- The estimate of service charges before you buy will also cover charges for building services such as caretaking or the provision of hot water. But charges of this kind can change, even during the first 5 years of a lease.
- You will also be told about any known structural defects affecting the building. If the council wants you to pay for work to put them right during the first 5 years, the estimate of service charges for repairs must cover this. But you may also have to pay for some of the costs of work done after the first 5 years.
- The law protects you from service charges that can be shown to be unreasonable. Your rights are described in a booklet 'Residential Long Leaseholders' that is available free of charge. If you want a copy, you can download it from the council Right to Buy website or you can write to the Department for Communities and Local Government (see useful contacts in section 16).