What is a Right to Buy mortgage?

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Right to Buy is a Government scheme that allows council – and housing association – tenants to buy their council home at a discounted rate. It was introduced in the 1980s, as a way of giving people on low incomes the opportunity to get on the property ladder. Under the current scheme, which is available only in England, tenants can apply to buy their home if it is their only, or main, residence and is self-contained.

You also need to be a secure tenant, have had a public sector landlord for at least three years and have a clear debt record.
Tenants wanting to purchase their council or housing association house will be eligible for a 35% discount on the property’s market value if they have lived there for between three and five years. Beyond that, the discount goes up by 1% for every full year of tenancy, up to a maximum of 70%, or £84,200 (£112,300 in London), whichever is lower.

Tenants wanting to purchase a flat can receive a 50% discount for between three and five years and after that, the discount goes up by 2% for every extra year of tenancy, again up to 70% or £84,200 (£112,300 in London).
So, if you’ve been a tenant for 10 years, it would equate to a 40% discount, meaning you could purchase a £150,000 house for £90,000.

What is a Right to Buy mortgage?

Right to Buy mortgages aren’t really a thing. If you are looking to buy your council property through the Right to Buy scheme, you’ll still have access to the same range of mortgages and lenders as standard property buyers.

But, with the Right to Buy discount applied, this can help with things like your deposit size and affordability criteria. In effect, the scheme helps to create a more level playing field for people with low incomes to get on the property ladder using the same mortgages that are on offer to anyone else.

How do I apply for a Right to Buy discount?

In order to apply to the Right to Buy scheme, you need to complete and return an RTB 2014 form to your landlord. The form includes information such as how much your property is valued at, how the price was worked out and how much discount you are eligible for.

You may also need to provide surveys and any information about changes or problems with the property’s existing structure.
Once you have submitted the form, your landlord will respond by sending you an offer, after which you have 12 weeks to confirm your intention to buy. You can also request a valuation if you believe the landlord has overvalued your home and have the right to appeal if your landlord refuses your application.

How do I get a mortgage?

Buying a property is a big decision, especially if it is the first time you have owned a property, or you have been renting for a long time. Although the Right to Buy scheme is there to help make home ownership more affordable, there are many things other than your mortgage to consider. For example, as well as your monthly mortgage repayments, if you own your own home, you will also be responsible for any repair or maintenance costs that may have been covered by your landlord when you were a tenant, plus all your general living costs to think of.

And once you become a homeowner, you may lose your entitlement to certain welfare support, including Housing Benefit. You’ll also need to arrange the mortgage yourself – this is something your landlord won’t do for you. It always pays to shop around when you are looking for a mortgage to ensure you get the best deal. However, this can be overwhelming if you have never done it before.
Working with an experienced mortgage broker with expertise in Right to Buy will help ensure you get the right advice, tailored to your specific circumstances, to help you make the right choices.

Learn more

Although Right to Buy mortgages can help make home ownership a reality for you, you need to understand all your options before you take the plunge. My Mortgage Pro can connect you with an expert mortgage broker who can help you find the best solution. To find out more, fill out the form below to request a call and we’ll be in touch.