Right to Buy Mortgages
A Right to Buy mortgage will help you purchase your council house under the government’s scheme. There is also the Housing Association Right to Acquire. While there is no specific ‘Right to Buy mortgage’ product, advisors will always tailor their advice to suit you.
Get in touch for a free initial, no-obligation discussion about your mortgage situation.
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- Right to Buy Mortgages
- Read our Right to Buy guide
- Try our Right to Buy calculator
- What is the Right to Buy scheme?
- What discount can you get?
- Am I eligible for the Right to Buy scheme?
- What is preserved Right to Buy?
- Do I need a deposit to buy my council house?
- How do I apply for a Right to Buy mortgage?
- Right to Buy Mortgage Brokers
- Frequently asked questions
Right to Buy Mortgages
When buying your property, you will have access to virtually the same mortgages as any other borrower. Lenders will assess you in the same way as they would assess anyone else.
The amount lenders will be willing to lend and the interest rate you will be charged will depend largely on your loan-to-value ratio. This will be determined by the level of discount and any deposit you are able to provide. Other criteria such as your credit history and current income will also apply.
Specialist Right to Buy Mortgages
Are you interested in buying your council house or flat? We can help!
What is the Right to Buy Scheme?
‘Right to Buy’ is a government scheme. It gives people who are renting homes in the public sector the ability to buy their homes at a discounted price. It also includes the Right to Buy Housing Association scheme. There are also similar schemes in Northern Ireland, Scotland, and Wales.
What discount can you get?
The type of property will determine the discount you will be granted. The length of time you have been a tenant in the public sector will also apply.
- Flats and maisonettes: You’ll become eligible for a 50% discount after three years’ tenancy. After five years, the discount increases by 2% for each additional year you have been a tenant.
- Houses: You will be eligible for a 35% discount after being a tenant for three years. After five years’ tenancy the discount increases by 1% for every additional year of tenancy.
The total amount of discount that you can get from the 21st November 2024 is dependent on where you live, for example:
The maximum discount you can get is whichever is lower:
- 70% of the value of your property
- the maximum discount for your region
| Region | Maximum discount | Exceptions |
| North East | £22,000 | Not applicable |
| North West | £26,000 | Not applicable |
| Yorkshire and the Humber | £24,000 | Not applicable |
| East Midlands | £24,000 | Not applicable |
| West Midlands | £26,000 | Not applicable |
| Eastern | £34,000 | £16,000 in the district of Watford |
| South East | £38,000 | £16,000 in the areas of Reading Borough and West Berkshire, Hart District, Oxford and Vale of the White Horse District, the boroughs of Tonbridge and Malling, Epsom and Ewell, and Reigate and Banstead |
| South West | £30,000 | Not applicable |
| London | £16,000 | £38,000 in the boroughs of Barking and Dagenham and Havering |
Certain limitations apply to the discount. For instance, if your landlord has invested in maintaining the property, the discount amount may be reduced. Additionally, no discount will be available if the landlord’s spending on the property exceeds its current value.
Our Right to Buy mortgage calculator can help you gain an understanding of how much you may be able to borrow under the scheme.
Am I eligible for the Right to Buy scheme?
You may be eligible for a Right to Buy if the following applies to you:
- It’s for your main or only home.
- The property is self-contained.
- You qualify as a secure tenant.
- You’ve had a public sector landlord for a minimum of 3 years. This does not have to be 3 consecutive years.
- Your home is not due to be demolished.
You do not have any legal debt problems, including any outstanding possession orders.
What is Preserved Right to Buy?
You may qualify to purchase your home under the Preserved Right to Buy. This is where the property used to be owned by the council but has subsequently been sold to another landlord. This is a landlord such as a Housing Association. The change of ownership must have occurred whilst you were living in it.
Do I need a deposit to buy my council house?
Many lenders will use your discount towards your deposit. As such you will not always need any personal deposit.
However, this is not the case for all lenders. Some will still need you to have your own funds. This is typical if you have bad credit and need to use a specialist lender.
How do I apply for a Right to Buy mortgage?
Looking at your finances is a great place to start. Ensure this is something you want to commit to long-term. Aside from mortgage and utility payments, you’re also responsible for necessary maintenance and improvements to the property.
If you’re confident this is a route you want to take, the process is typically as follows:
- Complete a Right to Buy application form (RTB1) – this is online, or you can ask your landlord for a printed copy. Send it to your landlord by recorded or registered delivery to provide a record.
- Your landlord must respond within 4 weeks (or 8 weeks if they have been your landlord for less than three years). If they accept your application, they will need to get the property valued by a qualified surveyor.
- Your landlord will send you an offer within 8 weeks providing the property is a freehold. If it’s a leasehold this is extended to 12 weeks. It will detail the price they believe you should pay, how the price and discount were calculated and the amount of discount. Structural problems with the property will be noted. An estimate of the service charges for the first five years may be shown too.
- You’ll have 12 weeks to respond to their offer. You can also get an independent valuation carried out within this time. If they refuse your application, they must give a valid reason why.
- During this time, you’ll need to find a solicitor. You’ll also need a survey and to apply for a mortgage where applicable.
If all proceeds to your satisfaction, then you should soon be on the road to completion!
Yes, joint applications are possible for Right to Buy mortgages.
Usually, the named parties on a mortgage will be the same as on the Right to Buy paperwork. In turn, the same for the property title deeds. However, if the paperwork is in your name only, it may be possible to arrange the mortgage in joint names.
It could be that Right to Buy has not been an option for you until later in life. Or it may be that your circumstances have not been right for you to look into buying your home. Either way, it is possible for many people to get a Right to Buy mortgage even if they are retired.
Defining the term ‘retired’ is the important factor here. It can be a very broad term that doesn’t accurately describe your complete circumstances. It may imply someone of a mature age, and this can mean that certain lenders will not be able to help.
Some lenders however operate with more flexible criteria. These will consider several other factors aside from age, such as affordability. Everyone’s situation is unique, and you could still get a Right to Buy mortgage even if you are retired.
Attitudes to the self-employed have changed positively over the years. Self-employment has many forms. Many lenders can make allowances for income that may be less predictable or more difficult to quantify.
As ever, the key to getting a mortgage is affordability. Lenders assess self-employed people in the same way as individuals in standard employment: looking at income together with outgoings over a period of time.
Right to Buy mortgage brokers
When looking into any financial products, especially a mortgage, it’s worth getting expert advice. At The Mortgage Centres, we know the rigid approach by most mainstream Right to Buy mortgage lenders could put people off. But at the same time, we know how the discount under the scheme can make things that much more accessible.
We have experience with mortgages for people seeking to own their home under the Right to Buy scheme.
Right to Buy FAQs
When looking for a Right to Buy mortgage, only residential options are available, although during the clawback period the council may allow you to rent out the property. Always check with them before making arrangements. Once the clawback period is complete you can use the property as you wish.
We have assisted many Right to Buy purchases for those with bad credit. Whilst you may have more limited choices, it is not impossible for all. It is just knowing where to look and how to approach lenders.
At any time, you can sell your property after you buy it. Bear in mind that you may have to repay some or all the discount. This will apply if you sell within the period of the Right to Buy scheme. Typically, this is within the first 5 years.
Yes, it’s possible to remortgage the property. The difference is that you need to consider the clawback period. The council or housing association is likely to register a charge for the discount. If still in place additional legal work could be required.
Some alternatives to the scheme are:
- Shared Ownership. Part buy, part rent scheme.
- Deposit Unlock. A scheme between lenders and select developers.
- Joint Borrower Sole Proprietor (JBSP). Similar to a guarantor scheme.
- Mortgage Guarantee. A government scheme aimed at those with a 5% deposit.
Phil Scott
Director
About the author
Phil has worked in the financial services industry since 1992, having started with a large insurance company. He went self employed in 1996 as an Independent Financial Adviser before setting up his first company, Needham Market Home Financial in 1999.
After four years, he decided to concentrate solely on mortgages and related insurances, and The Mortgage Centres was born. Since then, Phil has been influential in the opening of several new offices as the business continues to grow.
Qualifications
Financial Planning Certificate: 1,2 & 3
Year Attained: 1992
Certificate in Mortgage Advice and Practice (CEMAP)
Year Attained: 2001
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