The Right to Buy Retention Agreement: A Guide for Homeowners
If you’re a homeowner who purchased your home through the Right to Buy scheme, you may have been approached by your local council with an offer for a retention agreement. But what exactly is a retention agreement and how does it benefit you?
A retention agreement is a legal contract between you, the homeowner, and your local council. It allows the council to retain a percentage of the value of your property in exchange for providing you with the Right to Buy discount. This agreement comes into effect when you sell your property, and the council will receive a percentage of the sale price equivalent to the value of the discount you received when buying the property.
So why would you sign a retention agreement? Firstly, it allows you to take advantage of the Right to Buy scheme, which can be a great way to get onto the property ladder or move to a bigger home. Secondly, it can provide you with greater flexibility when selling your home. By agreeing to the retention agreement, you can sell your property more quickly and easily, without having to wait for the council to release their share of the sale proceeds.
However, it’s important to understand that a retention agreement can also have some downsides. For example, you’ll be giving up a percentage of the equity you’ve built up in your home, which could impact the amount of money you receive when you sell. Additionally, the percentage retained by the council can vary depending on the value of your property at the time the agreement is signed.
Before signing a retention agreement, it’s important to seek legal advice to make sure you fully understand the terms of the agreement and any potential consequences. You may also want to consider alternative ways of financing your home purchase, such as a mortgage, which may offer more flexibility and potentially better financial outcomes in the long run.
Ultimately, the decision to sign a retention agreement is a personal one and will depend on your individual circumstances. It’s important to carefully weigh up the benefits and risks before making a decision. By understanding the ins and outs of retention agreements, you can make an informed choice and feel confident in your decision.