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Since the 1980s the Right to Buy mortgage scheme has been there to help council tenants purchase their home at substantial discount and become homeowners - let us help you own the home you love!
In order to help more people onto the property ladder, Right to Buy mortgage lenders are there to help anyone who meets the criteria to own their council home. If you’ve been a council tenant, or in some cases a housing association tenant, for at least three years (even if not continuously) then you may be able to find a Right to Buy mortgage. The process can be confusing, requiring a formal application and containing strict deadlines, so we are here to help make that process easier.
The eligibility criteria for a Right to Buy mortgage scheme applies to both you and your property, so we highly encourage getting in touch to seek our advice as soon as you are able. We can then help you to assess your financial and credit status, the discount you may be qualified for, and whether a Right to Buy mortgage is the best option for you or if there’s a suitable alternative. Whatever situation you are in, our priority is always to find what works best for you and your home.
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Whether you’re weighing up your options or you’re ready to start the process, our advisors are here to help assess the best options for your situation. How can we help you?
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First Time Buyer Mortgages
Are you a first-time buyer? Our first-time buyer mortgage page might have some alternative options to a Right to Buy mortgage when it comes to affording your own home.
More about first-time buyer mortgages
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Key Facts
1. What is a Right to Buy Mortgage?
Right to Buy is a government scheme that helps existing council tenants purchase their current homes at substantial discount to become homeowners. The discount can often be used as the entire or vast majority of the property deposit meaning you can own your home with less savings. In order to receive a Right to Buy mortgage, however, you and your property will need to meet the eligibility criteria.
2. Eligibility
To qualify for the Right to Buy mortgage scheme, you need to meet key criteria. You must have been a council tenant for at least three years (not always continuously) and have lived in your current home for at least 12 months. Your home must not be due to be demolished or be part of sheltered housing for disabled or elderly people. You must also not have any serious debt issues.
3. Discounts and Deposits
The Right to Buy discount depends on the market value of the property up to a maximum of 70%. After three years’ council tenancy, you qualify for 35% discount on houses and 50% discount on flats. This increases annually until you reach the maximum value. A portion or all of this discount can then be used in place of a deposit on the property and help you afford a Right to Buy mortgage.
4. Selling a Right to Buy Property
It’s important to be sure you want to buy and stay in your council home as you can’t purchase your home using Right to Buy and then instantly sell it to make a profit. If you sell within five years you’ll need to pay back some or all of the discount, and if you sell within 10 years you must offer it to your previous or another social landlord first at market price. Only after this can you then sell on the open market.
Right to Buy Mortgage Help!
Do you still have a few more questions about the Right to Buy mortgage scheme? The answers may be below or we’ll always be happy to offer our advice directly.
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1.
What is a Right to Buy mortgage?
Right to Buy is a government scheme designed to help existing council tenants buy their current homes at a large discount. There are many Right to Buy mortgage lenders out there who will help you become a homeowner using this scheme if you and your property meet their criteria. If you’re not sure whether you qualify, or you need more information just give us a call.
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2.
What is a Right to Acquire mortgage?
Right to Acquire is an extension of the government Right to Buy mortgage scheme where housing association tenants can also buy their current homes at a discount. The eligibility and criteria for applicants and properties is slightly different to Right to Buy, so please do call us if you want to assess your situation and receive our advice.
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3.
Am I eligible for a Right to Buy mortgage?
In order to qualify for the Right to Buy mortgage scheme, you must have been a council or housing association tenant for at least three years (although not always continuously), live in the property as your only or main home, not live in sheltered housing for the elderly or disabled, not suffer from any serious debt problems, not have any outstanding possession orders against you, and the home must also not be due to be demolished.
The Right to Buy mortgage scheme currently only applies to tenants in England.
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4.
What discount could I get?
The discount you receive on the Right to Buy mortgage scheme will be calculated based on the market valuation of your home. This can vary from county to county, the length of time you’ve been a council tenant, and also whether your home is a house or a flat.
After three years’ council tenancy (including 12 months in your present home) you are eligible for a 35% discount on a house and a 50% discount on a flat. These discounts can then increase up to a maximum 70% value (currently £84,200, or £112,300 in London).
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5.
What documents do I need to provide for a Right to Buy mortgage?
In order to receive a mortgage using the Right to Buy scheme, you will need all of the usual documentation including proof of identity, proof of address and financial statements, but you will also be required to complete a special Right to Buy application form. Before completing this form, we highly recommend seek good advice to make sure you know what you can afford. Please don’t hesitate to call one of our advisors to discuss your situation further.
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6.
Why would I want to buy my property?
A home is a valuable asset that can give you and your family an investment for the future. It also gives you the freedom to make the changes you want in your home and the money you pay in mortgage repayments each month goes directly into the value of the property you own rather than into your landlord’s pocket. Despite the benefits however, a property purchase is a decision that shouldn’t be taken lightly as it has responsibilities and financial commitments that you wouldn’t otherwise have as a tenant.
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7.
Are there any risks in a Right to Buy mortgage?
Owning any home has its risks. You need to make your mortgage repayments each month or risk your home being repossessed, as well as covering maintenance and repair costs, ensuring you have adequate insurance and protection and you may also need to help with the upkeep of residence communal areas.
Buying a council house, however, does have a few extra risks too. Council houses may be at risk of demolition, not to mention their value isn’t guaranteed to increase which could put you out of pocket. As a home owner, you will also no longer receive any housing benefit payments. If you want to know more about the relevant risks to your personal situation, our advisors can offer advice. Just give us a call!
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8.
What if I then want to sell my property?
On the Right to Buy mortgage scheme you can’t just purchase your home with a large discount and immediately sell it to make a profit. If you sell within five years you will have to pay back all or some of the discount, and even if you sell your home within ten years you will be required to offer it to your old landlord or another social landlord at market price first before putting it on the open market. Before buying your council home, think carefully about how long you may want to stay there as it could make buying your next home slower and more expensive.
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9.
Do I still need a deposit?
Different Right to Buy mortgage lenders will have slightly different criteria in the amount that they will lend, but it can be possible to use your Right to Buy discount as your entire deposit. You will still need some savings for the process however, as there will be survey and legal fees that could cost at least a few thousand pounds. We are very happy to offer guidance on your specific property and situation so you know how much money you may need. Don’t hesitate to get in touch!
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10.
Are there any alternatives to a Right to Buy mortgage?
If you feel Right to Buy isn’t right for you, there are other government schemes available such as Help to Buy or shared ownership. To discuss your options, please do give us a call to talk about your situation further. We are always here to help find the mortgage that is right for you.