At Just Mortgage Brokers, we work with hundreds of lenders offering Right to Buy mortgages. If you’re looking to buy your council house or housing association property, we can help you find a mortgage deal that suits your financial circumstances. Even if you have a poor credit history, it doesn’t mean you won’t be eligible for a Right to Buy mortgage.
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What Is a Right to Buy Mortgage?
Mortgages for Right to Buy properties work in the same way as typical residential mortgages. In fact, anyone purchasing their council house through a Right to Buy scheme has access to the same mortgage deals as anyone else. The amount you can borrow will depend on the market value of the property, the size of your deposit, and various affordability criteria such as your income and credit history.
Does a Right Buy Mortgage require a deposit?
The majority of lenders will accept your Right to Buy discount as a deposit, but others will still ask for a cash deposit, so it’s worth bearing this in mind when searching for a Right to Buy mortgage. Consider that a larger deposit could result in lower monthly mortgage repayments, and may also allow you to access a range of more attractive mortgage deals.
What if I have bad credit?
If you are looking for a Right to Buy mortgage but are concerned you may have a bad or adverse credit score, you can still obtain a mortgage. Here at Just Mortgage Brokers, we have access to a number of mortgage deals for people who don’t have a perfect credit history, so feel free to get in touch today. Alternatively, why not take a look at our guide on securing a Right to Buy mortgage with bad credit, which covers this in more detail.
What is the Right to Buy scheme?
While changes in government policy reduced discounts and changed who could make use of Right to Buy, further 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 extended the scheme to make it available to housing association as well as council tenants, although at the time of writing this was still in its early stages, with a voluntary Right to Buy pilot scheme rolled out in August 2018.
The government has also reduced the qualifying tenancy period – you now only need to have been a public-sector tenant for three years, rather than the previous five – and increased the maximum Right to Buy discount available – it is now £80,900 (or £108,000 in London), increasing in subsequent years in line with the Consumer Price Index (CPI).
The maximum discount is correct as of October 2018.
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 three years’ tenancy. After five 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 £80,900, or £108,000 in London).
- For flats, public-sector tenants become eligible for a 50% discount after three years’ tenancy. After five 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 £80,900, or £108,000 in London).
What discount could I be eligible for?
You can use our Right to Buy discount calculator to see how much of a discount you may be eligible for. Simply enter the current value of your home, select whether it’s a house or flat, and specify how many years you have been a tenant. Once you have provided this information, we will give you an estimate of your Right to Buy discount.
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:
- You must be a secure tenant residing in a self-contained property
- It must be your only or main home
- You must have been a public-sector tenant (with a council, housing association or another public-sector landlord such as an English NHS trust) for a total of at least three years.
You don’t have to have been a public-sector tenant for 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 three 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 website.
How do I apply for Right to Buy?
You apply for Right to Buy by sending a completed application form to your landlord, who will respond by sending you an offer. This will outline the following:
- The price they believe you should pay for your property
- How the price was worked out
- Your Right to Buy discount and how it was calculated
- Description of the property, plus any land, that is included in the price
- Estimates of service charges (for a flat or maisonette) for the first five years
- Any existing problems with the property’s structure
Once you have received an offer, you have 12 weeks to confirm your intention to buy. You also have the right to request an independent valuation if you believe the landlord has overvalued your home. This must be requested within three months of the offer.
If the council or housing association refuses your application for Right to Buy, they must provide a reason why.
Experts in Right to Buy mortgages
As with any financial product, it’s always worth seeking expert advice first. At Just Mortgage Brokers, we can advise on the Right to Buy mortgage options that are available to you, and our team will happily guide you through the whole application process. We work closely with leading brands and smaller specialist lenders, meaning we have access to exclusive mortgage deals to suit all requirements. Get in touch today to find out how we can help.