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About Right to Buy Mortgages

The Right to Buy scheme allows eligible council property tenants to buy their homes at a discounted price. Compare the latest interest rates and other important features of Right to Buy mortgages.

Think carefully about securing debt against your home. Your home may be repossessed if you do not keep up repayments on your mortgage

Information written by Tim Leonard Last updated on 28 July 2022.

What is Right to Buy?

Right to Buy is a scheme designed to allow eligible council and housing association tenants in England to buy their homes at a discounted price. The Right to Buy scheme has helped around two million people to buy their council house since being introduced by the government in 1980.

Is there a Right to Buy in Scotland, Wales and Northern Ireland?

A similar scheme – known as the House Sales Scheme – operates in Northern Ireland, with further information available on the government website. However, neither Right to Buy, nor any other scheme of a similar nature, are currently available in Scotland or Wales.

What is a Right to Buy mortgage?

A Right to Buy mortgage is a mortgage you take out if you’re using the Right to Buy scheme but don’t have the necessary funds to complete the purchase of your home.

How do Right to Buy mortgages work?

Right to Buy mortgages work in a similar way to how any other mortgage works. This means Right to Buy mortgage lenders will need to assess your income and outgoings before deciding whether a mortgage is affordable to you. Your credit score will be considered too.

Importantly for some, however, if you don’t have a deposit, a lender might be willing to count your Right to Buy discount as your deposit instead.

Use our mortgage comparison tool to find out which Right to Buy mortgages might be available to you today.

What is the Right to Buy discount?

The Right to Buy discount is how much below the market value you’re able to buy your home for if you’re eligible for the scheme.

The size of your discount will depend on:

  • the length of time you’ve been a public sector tenant
  • whether you’re buying a house or a flat
  • how much your property is worth
  • any outlay your landlord has made in recent years, either building or on the maintenance of your home.

The largest discount available at present is £87,200 in England, or £116,200 if you live in London. These amounts rise in line with consumer price index (CPI) inflation every April.

The government Right to Buy mortgage calculator can give you an idea of the discount you might expect, with the type of property you live in, and your time spent as an eligible tenant, both crucial.

Discounts on houses

If you want to buy a house and have been a public sector tenant for three to five years, you could be entitled to a 35% Right to Buy discount. The discount then increases by 1% for each additional year beyond five years you’ve been an eligible tenant, up to a maximum discount of 70% (and subject to the maximum monetary discounts allowed).

Discounts on flats

If you want to purchase a flat, the discount is 50% if you have been a tenant of a public sector landlord for three to five years. For each year longer than five years, this rises by 2% to a maximum of 70% (and in line with the overall discounts permitted).

Am I eligible for Right to Buy?

You can apply to purchase your council home under the Right to Buy scheme if:

  • It is your only or main home – this means you’ll need to live there.
  • Your home is self-contained, so you don’t share a bathroom or kitchen with others who are not part of your household.
  • You’re a secure tenant, meaning a legal contract binds you and your landlord.
  • You have been the tenant of a public sector landlord for three years – this is in total, not necessarily in consecutive years, and can include time under a housing association or NHS trust.
  • You have no legal issues with debt or outstanding possession orders.

If you share a tenancy with someone, you can jointly apply for the Right to Buy scheme. Alternatively, you can apply with up to three members of your family whom you have lived with in the past 12 months, even if they don’t share your tenancy.

If you live in an ex-council home that was previously sold to another public sector landlord, such as a housing association, while you lived there, you may also still qualify for Right to Buy (under what is called ‘Preserved Right to Buy’).

Should you be a housing association tenant but don’t qualify for Preserved Right to Buy, you may still be able to buy your property at a discount of between £9,000 and £16,000 under the Right to Acquire scheme.

How do I apply for the Right to Buy scheme?

Before you apply for a Right to Buy mortgage, you should apply for the Right to Buy scheme itself. If you want to use Right to Buy to purchase your council home, you will need to:

  • Complete a Right to Buy application form (known as an RTB1 notice) and send it to your landlord.
  • Await your landlord’s decision – this should be within four weeks (or eight weeks if they have been your landlord for under three years). If they say no, reasons must be given for the rejection.
  • If they say yes, you should receive an offer within eight weeks of agreeing if your property is freehold, or 12 weeks if it’s leasehold.

The offer will include the price your landlord wants you to pay for the property and your discount. It will also include details of the property and land being bought, including any known problems in relation to these. If you are buying a flat, the offer will include estimates of any service charges, which might be payable during the first five years of ownership.

Once you have received the offer, you have 12 weeks to decide if you still want to buy. If you don’t reply within this timeframe, you’ll receive a reminder that gives you an additional 28 days to reach a decision. However, you are free to say you don’t wish to proceed and want to carry on renting at any time.

It is possible to challenge an offer if you feel a valuation is too high. You can also appeal an outright rejection to sell to you if this is because your property has been deemed suitable for housing the elderly.

What are the benefits of Right to Buy?

The main advantage of Right to Buy is that it gives you, as a tenant, the chance to buy your own home at a discounted price.

Are there any downsides to Right to Buy?

One downside of a Right to Buy mortgage is if you sell the property within five years, you will have to pay back some of the discount you have received. This is on a sliding scale of 80% of the discount in the first year to 20% in the fifth year – it must be paid back in its entirety if you sell within a year.

If you sell within 10 years you must also give your housing association or social landlord the option to buy it back at market price first – even if you could get a better price on the open market. The landlord has eight weeks to decide if they want to take up the option, after which you can then sell it to anyone if they decide not to.

Having to buy the property you are living in, rather than getting to choose from other properties on the market, might also be considered a drawback.

How do I get the best Right to Buy mortgage for me?

Our mortgage comparison tool can help to find a Right to Buy mortgage to suit you. If you have an idea of your property value and the size of mortgage you need, you’re ready to use our comparison tool. For each deal that is highlighted as a fit for your search criteria, there will be an indication of the initial interest you’ll pay, the APRC, and any associated charges. You will also see an estimate of what your monthly repayments might be.

Right to Buy Mortgages FAQs

What is a Right to Buy mortgage?

A Right to Buy mortgage can provide the finance that council and housing association tenants need to secure if they want to buy their home at a discounted price using the Right to Buy scheme.

Can I use my discount as the deposit?

Some Right to Buy mortgage lenders will accept the discount as your deposit, while others will not. If you’re unsure of a lender’s stance, ask them to confirm it. And if you are struggling to find a lender that is willing to use the discount as a deposit, a mortgage adviser can usually point you in the right direction.

Can I get a Right to Buy mortgage with bad credit?

It might be possible to secure a Right to Buy mortgage if you have bad credit, but it will be down to an individual lender’s discretion and you being able to meet the criteria they set out. A mortgage broker might be able to help if it’s proving hard to find a lender that is willing to consider your credit situation. Alternatively, you could approach a bad credit mortgage lender directly.

Do all lenders offer Right to Buy mortgages?

Not all lenders have branded Right to Buy mortgages. However, if you have a particular lender in mind, you might find you don’t necessarily need a specific Right to Buy mortgage to buy your property.

How is Right to Buy different from Help to Buy?

Right to Buy allows current eligible council and housing association tenants to buy the property they currently rent at a discount. Help to Buy allows would-be buyers to buy their first home by offering either an equity loan to the buyer or a government-backed guarantee to the mortgage lender.

Is a Right to Buy mortgage right for me?

If you currently rent a council or housing association property and you can afford to take out a mortgage and meet the repayments, then a Right to Buy mortgage could be right for you. However, if you are in any way unsure, it is usually best to seek the advice of a mortgage adviser.

What do I need to do to get a Right to Buy mortgage?

To access a Right to Buy mortgage you will need to meet your lender’s lending criteria, including passing a credit score assessment and being within its age limit. Many lenders will accept the government discount on the property as a ‘deposit’ although some won’t, so it is worth checking before choosing a lender. To access the Right to Buy scheme, you must have been a council or housing association tenant for three years and meet certain other criteria.

Can I be refused a Right to Buy mortgage?

You might be rejected for a Right to Buy mortgage if you don’t meet the lender’s eligibility, affordability or credit profile criteria.

What are the alternatives to a Right to Buy mortgage?

If a Right to Buy mortgage isn’t the solution that you need, you could explore other government initiatives aimed at helping people buy their own home, including Help to Buy and Shared Ownership mortgages. A low deposit mortgage may also allow you the chance to buy a property.

How can I compare Right to Buy mortgages?

You can compare Right to Buy mortgages using NerdWallet's mortgage comparison tool. Supply only the minimum of information, such as your property value and loan amount, and you’ll see the Right to Buy mortgages that are suitable to your search criteria.

About the author:

Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more

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