If you're a council tenant, Right to Buy could be your way to become a home owner. There's no lengthy search for a dream home, you get a discount and may not even need a deposit. A mortgage broker can help you find the right mortgage to use.
How much is the Right to Buy discount?
The discount varies depending on whether you’re buying a council house or flat, and how long you’ve been a public sector tenant.
It’s also capped at whichever is lower, 70% of the property value or £96,010 outside of London, £127,940 in London. This maximum discount threshold increases every April with the consumer price index.
If you’re buying a house the discount is:
35% for a tenancy of 3-5 years and 1% more for each year longer than that - to a maximum of 70%. For example, if you’d lived in public sector property for 10 years, you would get a 40% discount.
If you’re buying a flat the discount is:
50% for a tenancy of 3-5 years and 2% more for each year longer than that - to a maximum of 70%. For example, if you’d lived in public sector property for 10 years, you would get a 60% discount.
Your discount may be reduced if:
- You’ve used the scheme before
- Your landlord has spent money on maintaining or improving your property in the past 10 years - and it was acquired by them before 2 April 2012
- Your landlord has spent money on maintaining or improving your property in the past 15 years - if it’s ex-council or it was acquired by them after 2 April 2012
If your landlord has spent more on your home than it’s currently worth, you won’t get a discount at all.
Learn more about the Right to Buy scheme and discount on the gov.uk website.
Am I eligible for Right to Buy?
You must meet the following criteria to qualify for the Right to Buy scheme:
- It must be your only or main home
- You must have a secure or flexible tenancy - one that lasts a lifetime
- It must be a ‘self-contained’ home - so have no shared rooms, such as the kitchen or bathroom
- The property can’t be sheltered or adapted for over people over 60 or with disabilities
- You can’t have any major debts or anti-social behaviour orders
- You must have been a public sector tenant for at least 3 years
What is a public sector tenant?
You can only apply for the scheme if you currently live in a property that is or used to be owned by a council. Although to boost your discount you can add time spent in any of the following public sector properties to your total tenancy time, even if it wasn’t directly before your current one:
- Council or ex-council
- Housing association
- NHS trust
- Armed forces
You also can use the Right to Buy eligibility quiz on the government website to find out if the scheme is open to you.
Should I buy with Right to Buy?
- The discount could make home ownership possible if it wasn’t before
- Some mortgage lenders let you use the discount as a deposit, meaning you won’t need to save one
- Property ownership is an investment - property value typically increases over time
- You can alter the property to suit you, without any council restrictions
- You’re responsible for paying a mortgage - a greater commitment than rent
- There are other costs involved with buying a home on top of mortgage repayments, such as arrangement and legal fees
- Some mortgage lenders ask for a cash deposit - a mortgage broker can help you find one that doesn’t if you don’t have one
- You’ll need to pay for your own repairs
- If you buy a council flat it’s probably a leasehold property, meaning you’ll have additional maintenance costs
- If you sell your home within 5 years, you’ll need to repay some of the discount
- Property value can fall as well as rise
What our expert says
Right to Buy mortgage FAQs
No, it’s similar, but not the same. Right to Acquire is for housing association tenants only. The discounts are fixed and smaller than those available to Right to Buy applicants - between £9,000 and £16,000.
The rules are similar, so you’ll need to have lived in public sector property for at least 3 years. If your housing association home used to be owned by the council, you may also be eligible for the Right to Buy scheme. Ask your landlord if you have ‘preserved' Right to Buy.
Learn more about the Right to Acquire scheme on the GOV.UK. website.
Yes you can, but they’ll need to meet the terms of the scheme, which state:
Joint applicants must either:
- Be on the same tenancy
- Be a family member who has lived with you for 12 months or more
- Be your spouse or civil partner
If you’re buying with another tenant, the discount is based on who’s been a public sector tenant the longest - not added together.
Up to 3 family members who meet the above criteria can be added to the application, and some mortgage lenders allow up to 4 applicants on a joint mortgage.
If your children don’t live with you, they can't be on the Right to Buy application and own the home jointly with you. Nothing legally prevents them from helping you with the mortgage costs though.
You could use a joint borrower sole proprietor mortgage, where their income is used to help you meet the affordability criteria. They could also help you to buy using a family assist or more traditional guarantor mortgage.
If they want to buy you the house without your help it should also be possible, but you’ll need to speak to a broker.
If you live in an ex-council house that is now owned by another public sector landlord, such as a housing association, you may have the preserved Right to Buy.
This depends on when the property ownership changed, so it’s best to ask your landlord.
If you disagree with the price the landlord offers to sell your home for, you should contact them to explain why.
You have 3 months to do so, and must also ask them for an independent property valuation. An HMRC district valuer then assesses the value of your home and you’ll have 12 weeks to accept their figure or turn it down.
No, it’s an entirely different scheme. Both are to help people get onto the property ladder, but the rent to buy scheme is only available through housing associations.
It’s known by a range of different names depending on where you live. You can find more information about Rent to Buy on the GOV.UK. site.
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Here's some tips to bear in mind when you view property.
YOU SHOULD THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME/PROPERTY. YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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