Right to acquire rules for housing association and PRPSH tenants

The right to acquire for tenants of private registered providers of social housing (PRPSH) and the preserved right to buy for former tenants of local authorities.

This content applies to England

What is the right to acquire?

The right to acquire for tenants of private registered providers of social housing (PRPSHs) was introduced in the Housing Act 1996. It is now contained in the Housing and Regeneration Act 2008.[1] It applies to assured and secure tenants of all PRPSHs (whether charitable or not and including housing trusts) but excluding co-operative housing associations.[2]

The provisions governing the right to buy scheme that applies to local authority tenants applies in relation to the right to acquire except where regulations specify otherwise, for example in relation to the available discounts.[3]

Qualifying for the right to acquire

In order to qualify for the right to acquire it is necessary to meet the following conditions:

Qualifying tenancy

The tenant must have one of the following tenancies:[4]

  • assured

  • secure

  • assured shorthold (AST) for a minimum of two years or more and granted on or after 1 April 2012

The following tenancies are excluded:[5]

  • periodic ASTs

  • ASTs for a fixed term of less than two years

  • ASTs that began before 1 April 2012

  • long leaseholders

  • tenancies at intermediate rent (this usually relates to shared ownership)

Not subject to exclusions from the Right to Buy for council tenants

Tenancies and the tenants that fall into one of the exclusions to the Right to buy (see 'exclusions from exercising the right to buy' on the page 'Right to buy scheme' for details) do not qualify for the right to acquire, unless the exclusion relates to lettings by charitable registered providers of social housing or trusts, PRPSHs that have not received grants from certain public funds, and some properties specifically for older people.[6]

Residence criteria

The tenant must meet the residence requirements as for the Right to buy scheme.[7]

Properties type and location

The property must have been built or acquired wholly or in part on or after 1 April 1997 with a social housing grant, using money in the disposal proceeds fund of the registered social landlord or bought from a public sector landlord (for example, a local authority).[8]

The accommodation must not be in a designated rural area. The Secretary of State may designate certain rural areas as ones where the right to acquire does not arise – this has been done on a number of occasions.[9]

The property must not be normally be let to people who have special needs and are provided with 'intensive housing assistance' by the landlord.[10]

The amount of debt owed on the property must not exceed the purchase price plus the discount due to the tenant.[11]

A tenant who has the right to acquire may, with the consent of the landlord, exercise it to buy another property from the same landlord.[12]

Right to acquire for joint tenants and family members

Joint tenants and members of the tenant's family can exercise the right to acquire in the same way as for the right to buy.[13]

Property valuation

The mechanism for calculating the property value and the discount is the same as for the right to buy.

However, the Secretary of State has specified a different amount or rate of discount.[14] The discount varies between £9,000 and £16,000 according to the local authority area and is also limited by the provision that the maximum discount is less than 50 per cent of the market value of the property.[15]

How to exercise the right to acquire

The right to acquire procedure is similar to the right to buy procedure.

Tenant application

Tenants first need to complete form RTA1, which should be available from their landlord.[16] The landlord should then reply to the tenant, telling them whether they have the right to acquire. This should be done within four weeks, or eight weeks if part of the tenant's qualifying period for the right to acquire has been spent with another landlord.

Reasons must be given if the landlord denies the tenant the right to acquire.

Tenants who have been granted the right to acquire may be offered an alternative property to purchase from their landlord. Landlords do not have a duty to offer an alternative property, and tenants do not have to accept one.

Landlord response

The landlord should then send the tenant an offer notice on form RTA3, within eight weeks of notifying the tenant that they have the right to acquire, or 12 weeks if the property is a flat or maisonette.[17]

The offer notice should contain certain information, such as the sale price, an estimate of the next five-years' service charges for repairs and improvements, and the tenant's discount entitlement.[18]

Tenants may appeal against the landlord's valuation within three months of receiving the offer notice and the district valuer will make a determination.[19] There is also a right to a review of the valuer's opinion.[20]

Accepting or rejecting the offer

From the time of receiving the offer notice (or where the tenant has appealed, the time of receiving the valuer's determination or redetermination), the tenant has 12 weeks to respond in writing letting the landlord know whether they wish to go ahead with the right to acquire purchase or to withdraw the application.[21]

If the tenant does not respond within this time, the landlord can serve a notice requiring such a response within 28 days, and unless unreasonable to do so can treat the application as withdrawn if the tenant does not respond by the deadline.[22]

Where there are no disputes about the purchase price or other terms or such disputes have been settled, the landlord can, not less than three months after serving the offer notice, serve a notice requiring the tenant to complete the purchase within a set time frame or to provide details of matters outstanding.[23]

Service charges

A tenant who buys the leasehold of a flat, or sometimes, the lease of a house, must pay service charges. There are restrictions on the total amount that can be recovered from the tenant in service charges for repairs, maintenance and improvements work in:

  • the five years following the sale of the property[24]

  • any five-year period, where specified conditions apply[25]

With effect from 12 August 2014, a PRPSH has the power to waive or reduce service charges for repair, maintenance or improvement works if it considers that the tenant will suffer exceptional hardship otherwise.

Selling a property bought under the right to acquire

The rules for selling a property bought under the right to acquire are the same as those for the right to buy.

Tenants who completed a purchase under the right to acquire before 18 January 2005 must repay some or all of their discount if they sell the property within three years. Tenants who completed a purchase under the right to acquire on or after 18 January 2005 must repay some or all of the discount if the property is sold within five years of purchase.

Deferred sale agreements will also trigger the repayment of any discount from the date of the sale agreement.

If a tenant who purchased a property under the right to acquire sells it within ten years of purchase, the landlord has the right of first refusal.

Fraudulent claims

A fraudulent claim for the right to acquire is a criminal offence under the Fraud Act 2006.

From 6 April 2014 in England, and 28 March 2014 in Wales, local authorities can compel listed organisations to provide them with information where it is reasonably required for the purpose of preventing, detecting or securing evidence for the conviction of an offence of making a fraudulent claim.[26]

The listed organisations are:

  • banks

  • building societies

  • other providers of credit

  • telecommunications providers

  • utilities companies

Voluntary right to buy

Since 2015, the government and the National Housing Federation have been in the process of formulating the details of a voluntary agreement to allow for the extension of the right to buy their home to assured tenants of private registered providers of social housing ( PRPSHs).

This would not involve amending the statutory provisions for right to buy for secure tenants set out in the Housing Act 1985. No implementation date has been announced for full roll out of voluntary right to buy. A regional pilot scheme in the Midlands was launched in August 2018 and an evaluation of the findings was published in February 2021. The Government has said that they will assess the impact of the pilot before making a decision on next steps.

The House of Commons Library briefing A voluntary Right to Buy for housing association tenants in England provides an overview of the background and progress of the scheme.

Voluntary purchase grant scheme

Registered social landlords may give grants to tenants, whether or not they have the right to buy or the right to acquire, to enable them to buy their own or another property under the voluntary purchase grant scheme. The tenant has no right to a grant. Details can be found in Housing Corporation Circular 06/96.

To be eligible, a registered social landlord tenant must:

  • be a secure or an assured tenant, but not an assured shorthold tenant, and have been a public sector tenant for at least two years

  • not be a tenant of a fully mutual housing association or Abbeyfield Society

  • not live in an almshouse or a rural area (settlements under 3,000 properties) designated as exempt from the scheme, or in a dwelling similar to those exempt from the right to buy (see 'exclusions from exercising the right to buy' on the page on the Right to buy scheme for details)

  • not live in a dwelling that the registered social landlord has excluded from the scheme because its current value is less than the cost of provision, it is subject to contractual restrictions on its use, it was originally provided with private or charitable money or it is subject to a planned repair programme

The size of the grant payable depends on what part of the country the tenant lives and whether the registered social landlord still has money available in its budget to pay the grant. More information about these schemes is available from individual registered social landlords.

Footnotes

  • [1]

    s.180 Housing and Regeneration Act 2008

  • [2]

    s.180 Housing and Regeneration Act 2008; s.17(2) Housing Act 1996 and para 2, schedule 5, Housing Act 1985

  • [3]

    s.17(2)(b) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008.

  • [4]

    s.180(1)(b) and s.180(2) Housing and Regeneration Act 2008

  • [5]

    s.180(2A) Housing and Regeneration Act 2008, as amended by s.165 Localism Act 2011; reg.4 The Transfer of Tenancies and Right to Acquire (Exclusions) Regulations 2012 SI 2012/696.

  • [6]

    schedule 5, Housing Act 1985 as amended by s.17(2)(b) Housing Act 1996 and reg 2(1) and para 40, Schedule 2, The Housing (Right to Acquire) Regulations 1997 SI 1997/619

  • [7]

    s.180(1)(e) Housing and Regeneration Act 2008

  • [8]

    s.180(1)(c) and s.181, Housing and Regeneration Act 2008

  • [9]

    para 1A, Sch.5, Housing Act 1985 as inserted by para 40, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619. See also Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the West Midlands) Order 1997 SI 1997/620; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the South West) Order 1997 SI 1997/621; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the North West and Merseyside) Order 1997 SI 1997/622; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the East) Order 1997 SI 1997/623; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the North East) Order 1997 SI 1997/624; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the South East) Order 1997 SI 1997/625; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas) Order 1999 SI 1999/1307.

  • [10]

    para 13, Sch.5, Housing Act 1985 as inserted by para 40, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619

  • [11]

    para 12, Sch.5 Housing Act 1985, as amended by Housing Act 2004.

  • [12]

    s.124A Housing Act 1985, as amended by para 5, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [13]

    s.17(2) Housing Act 1996, as amended.

  • [14]

    s.17(1)(a) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008 and Housing (Right to Acquire) (Discount) Order 2002 SI 2002/1091

  • [15]

    Art.2 and Sch. 1 Housing (Right to Acquire) (Discount) Order 2002 SI 2002/1091.

  • [16]

    s.122 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [17]

    s.125 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [18]

    s.125(2)-s.125(5) Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [19]

    s.128 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [20]

    s.128A and s.128B Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [21]

    s.125D Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [22]

    s.125E Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [23]

    s.140 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

  • [24]

    s.17(2) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008; paras 16B – D Sch.6 Housing Act 1985.

  • [25]

    Social Landlords Mandatory Reduction of Service Charges (England) Directions 2014.

  • [26]

    s.7(7) Prevention of Social Housing Fraud Act 2013; Prevention of Social Housing Fraud (Power to Require Information) (England) Regulations 2014 SI 2014/899; Prevention of Social Housing Fraud (Detection of Fraud) (Wales) Regulations 2014 SI 2014/826 (W.84).