The Ministry of Housing, Communities and Local Government (MHCLG) has issued updated statutory guidance to help local authorities process tenants’ Right to Buy applications more efficiently and in line with current legislation.
The comprehensive guide, Right to Buy: A Guide for Local Authorities, provides councils with step-by-step instructions covering every stage of the process – from initial tenant enquiries through to post-completion obligations. It reflects legislative changes including revised discount caps introduced in November 2024.
Key changes to discount structures
The guidance confirms that maximum cash discounts now range from £16,000 to £38,000 depending on region, with London boroughs generally receiving the lowest cap. However, applications received before 21 November 2024 remain eligible for the previous higher maximum discounts of £102,400 across England and £136,400 in London.
Discount percentages remain based on qualifying tenancy years: houses attract 35% for the first five years, increasing by 1% for each additional complete year up to a maximum 70%. Flats receive 50% for the first five years, then 2% per additional year up to 70%.
Statutory timescales and delay procedures
The guide reminds authorities of their legal obligations under the Housing Act 1985. Landlords must admit or deny an application within four weeks of receiving an RTB1 form – or eight weeks where the tenant has previous tenancies with other landlords.
Once admitted, a Section 125 offer notice must be issued within eight weeks for freehold properties and twelve weeks for leasehold properties.
Failure to meet these timescales triggers the statutory delay procedure, under which tenants can serve an initial notice of delay (RTB6). If landlords fail to respond with a valid counter-notice, tenants may issue an operative notice of delay (RTB8), resulting in rent paid during the delay period being treated as an advance payment towards the purchase price.
Where delay periods exceed twelve months, an additional 50% charge applies to the rent refund.
Cost floor adjustments
The guide details changes to the cost floor calculation following The Housing (Right to Buy) (Cost Floor) (England) Determination 2024. The cost floor period now extends to 30 years prior to receipt of the RTB1 – a significant increase from the previous 10 or 15-year periods for applications lodged after 21 November 2024.
Councils can include construction, acquisition, repair and maintenance costs exceeding £5,500, but administrative costs and interest are excluded. Where the cost floor exceeds the sale price, the discount must be reduced accordingly. In cases where the cost floor exceeds market value, tenants forfeit their discount entirely and authorities may still make a loss on the sale.
Property exemptions and appeals
Schedule 5 exemptions remain in place for certain property types, including dwellings for elderly or disabled persons, properties scheduled for demolition, and those in designated rural areas.
The guidance emphasises that authorities must maintain detailed written records demonstrating exactly how a property meets exemption criteria. For elderly persons’ dwellings denied under Part C of the RTB2, tenants have 56 days to appeal to the First-tier Tribunal (Property Chamber).
Leasehold requirements and service charges
For leasehold sales, the Section 125 offer notice must include five-year forecasts of maintenance, repair and improvement works, along with insurance details and service charge estimates. Following the Leasehold Reform (Ground Rent) Act 2022, ground rent is now restricted to a peppercorn – effectively zero financial value.
The guidance advises authorities to consider the Social Landlords Mandatory Reduction of Service Charges (England) Directions 2014 when preparing offer notices.
Post-completion obligations
The guide outlines ongoing responsibilities for authorities after sale completion. Under the Right of First Refusal provisions, former tenants wishing to sell within ten years of purchase must first offer the property back to the former landlord or another local social landlord at full market value.
Discount repayment provisions require homeowners to repay some or all of the discount if they sell within five years – 100% in year one, reducing by 20 percentage points annually to 20% in year five. However, authorities have discretionary powers under Section 185 of the Housing Act 2004 to waive repayment in exceptional circumstances, including demonstrable personal hardship, domestic violence threats, severe medical conditions, or essential employment relocation.
Good practice recommendations
Beyond statutory requirements, the guide encourages authorities to implement several good practice measures, including maintaining application registers, creating Right to Buy information packs, offering face-to-face advice sessions, and using coloured paper for notice of intention forms to improve tenant recognition.
The department stresses that the guide represents its view on the operation of the Right to Buy, not a definitive legal interpretation, and that landlords remain responsible for applying legislation correctly.
The full guidance is available on the GOV.UK website.
Photo: Jakub Żerdzicki
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