Right to Buy Mortgages

Right to Buy is a scheme which allows existing tenants of public-sector homes in England to buy the property they currently rent, at a price discounted below the market value. Right to Buy has existed in one form or another for decades, and enjoyed particular popularity in the 1980s, with over a million council houses sold to tenants. While changes in government policy reduced discounts and changed who could make use of Right to Buy, more recent changes to the scheme in 2015 have made Right to Buy both more attractive, and more widely available to public-sector tenants in England.

The recent changes extend the scheme to make it available to housing association as well as council tenants (though at the time of writing this is still in its early stages, being rolled out under a Voluntary Right to Buy pilot scheme).

The government has also reduced the qualifying tenancy period (you now only need to have been a public-sector tenant for 3 years, rather than the previous 5) and increased the maximum Right to Buy discount available – it is now £77,900 (or £103,900 in London), increasing in subsequent years in line with the Consumer Price Index (CPI).

Am I eligible for Right to Buy?

As with any home ownership scheme, there are certain eligibility criteria that you must meet in order to take advantage of Right to Buy. The main criteria are that you must be a secure tenant residing in a self-contained property which is your only or main home, and you must have been a public-sector tenant (with a council, housing association or other public-sector landlord such as an English NHS trust) for a total of at least 3 years.

Note that it doesn’t have to have been three consecutive years – if you have had a break in your tenancy you can still apply as long as you have been a public-sector tenant for 3 years altogether. Certain other factors, such as bankruptcy and other debt problems, can affect your eligibility for the scheme. You can check your eligibility on the government’s Right to Buy website.

How much is the Right to Buy discount?

The actual percentage discount off the market value of your home with Right to Buy varies depending on the type of property, and how long you have been a public-sector tenant:

  • For houses, public-sector tenants become eligible for a 35% discount after 3 years’ tenancy. After 5 years’ tenancy, the discount increases by 1% for each extra year you have been a public-sector tenant, up to a maximum discount of 70% (currently capped at a total of £77,900, or £103,900 in London).
  • For flats, public-sector tenants become eligible for a 50% discount after 3 years’ tenancy. After 5 years’ tenancy, the discount increases by 2% for each extra year you have been a public-sector tenant, up to a maximum discount of 70% (currently capped at a total of £77,900, or £103,900 in London).

You can use the government’s Right to Buy calculator to see how much of a discount you may be eligible for.

How do I get a Right to Buy mortgage?

You apply for Right to Buy by sending a completed application form to your landlord, who will respond by sending you an offer – if the council or housing association refuses your application for Right to Buy, they must provide a reason why. The government’s Right to Buy mortgage factsheet outlines some of the factors you should think about when looking for a mortgage to buy your home. The good news is that with renewed interest in the scheme, more lenders are now offering mortgages suitable for Right to Buy applicants.

Contact us today to discuss how we can help you find the best Right to Buy mortgage to suit your individual circumstances.