• Eligibility:
  • You must be a secure tenant of a council property or some housing association properties.
  • Typically, you need to have been a public sector tenant for at least 3 to 5 years to qualify.
  • The property must be your main home, and it must be self-contained.
  • Housing association tenants may qualify under a similar scheme called Right to Acquire.
• Discount on Purchase Price:
  • The Right to Buy scheme offers a discount based on how long you’ve been a tenant. The longer you’ve been renting from the council or a public sector landlord, the higher the discount.
  • For houses: You can get a discount of up to 70% of the property’s market value, capped at a maximum of £127,940 in London and £96,010 in the rest of England (as of 2023).
  • For flats: The discount can be up to 50%, increasing after 3 years as a tenant.
  • The actual discount depends on the location, type of property, and the length of time you’ve been renting.
• Right to Buy Mortgage:
  • You’ll need a Right to Buy mortgage to finance the remaining amount after the discount has been applied. The loan will cover the portion of the home’s price not included in the discount.
  • For example, if a home is valued at £200,000 and you receive a £70,000 discount, you’ll need a mortgage for the remaining £130,000.

• No Deposit Required (in some cases):
  • The Right to Buy discount can sometimes be used as a substitute for a deposit. This means you might not need to provide an upfront deposit, as the discount acts as your equity in the home.
  • However, some lenders may still ask for a deposit, especially if your credit history or financial situation requires it.
• Lower Loan Amount:
  • Due to the significant discount offered by the Right to Buy scheme, the amount you need to borrow is lower than a typical mortgage for a property of the same value.
• Affordability Checks:
  • As with any mortgage, lenders will assess your ability to repay the loan. They will look at factors such as:
    • Your income.
    • Credit history.
    • Debts and outgoings.
    • Employment status.
  • Even though you may not need a deposit, you’ll still need to prove that you can afford the mortgage payments.
• Repaying the Mortgage:
  • Once you secure a Right to Buy mortgage, you will make monthly repayments just like with a standard mortgage, covering both the principal (the amount borrowed) and interest.
• Post-purchase Restrictions:
  • If you sell the property within 5 years of purchasing it through Right to Buy, you may be required to repay part of the discount.
  • The amount you must repay is based on a sliding scale, depending on when you sell the property:
    • 100% in the first year,
    • 80% in the second year,
    • 60% in the third year, and so on.
  • If you sell the property after 5 years, you won’t need to repay any of the discount.
• Leasehold vs Freehold:
  • If you’re buying a house under Right to Buy, you’ll typically become the freeholder, meaning you own the property outright, including the land it’s built on.
  • If you’re buying a flat, you’ll usually be buying a leasehold, meaning you own the property but not the land, and you’ll need to pay ground rent and maintenance fees.

• Long-term council tenants who want to own their home.
• Tenants who can afford a mortgage but struggle to save a large deposit.
• Those looking to take advantage of significant discounts in property value.

Right to Buy mortgages are offered by various lenders, and terms can vary. It’s important to shop around or consult with a mortgage advisor to find the best deal.

Would you like more details on specific lenders or how to apply for a Right to Buy mortgage?