Council and housing association tenants in England and Northern Ireland earn the right to buy their property at a discounted price if they meet certain criteria. A Right to Buy mortgage helps you make the purchase.
You must have been a tenant for at least three years (five years in Northern Ireland). The longer you’ve been living in social housing, the bigger the discount could be. The Right to Buy scheme is for council tenants – but if you’ve since moved to a housing association
property, you may have a Preserved Right to Buy. Check your eligibility with your housing association.
The amount of discount you get depends on the type of property and how long you’ve been a tenant. For example, in England, a tenant living in a house for four years gets a 35% discount on the market value. On the other hand, a tenant living in a flat for the same amount of time gets a 50% discount. The Right to Buy calculator can help you work out what discount you might receive.
A Right to Buy mortgage helps you pay for your property. So, you don’t need to have a huge cash lump sum available to buy your home from the council, just enough income for the mortgage. How much you can borrow, and making sure you get the best deal, is complicated. Use an expert mortgage broker to guarantee that you’re getting the best Right to Buy mortgage.
How much can I borrow?
How much will my mortgage cost?
Find a mortgage
Why choose us
Eligible public sector (i.e. council) tenants could potentially buy their home at a discounted purchase price in England.
You receive a bigger discount if
- you live in London compared to elsewhere in England;
- you have been a public sector tenant for many years;
- you live in a flat rather than a house.
If you live in a house, you’ll get a 35% discount after you’ve been a public sector tenant for three years. This discount will remain until you have had five years of public sector tenancy.
After five years, the discount goes up by 1% for every extra year up to a maximum of 70% or £84,200 in England and £112,300 in London boroughs, whichever is lower.
In case of a flat, you’ll get a 50% discount after you’ve been a public sector tenant for three years. This discount will remain until you have had five years of public sector tenancy.
After five years, the discount goes up by 2% for every extra year up to a maximum of 70% or £84,200 in England and £112,300 in London boroughs, whichever is lower.
The actual figures mentioned above (maximum £84,200 in England and £112,300 in London) are valid during the tax year of Apr 2020 – Mar 2021 and increase every year.
If you are interested in buying your home, first you will need to contact your landlord (the council). They will work with you to establish the value of the property, the discount you are eligible for and the purchase price.
As a Right to Buy mortgage broker, we can assess your borrowing potential to confirm whether you can afford to buy your home, what the best Right to Buy mortgage deal is for you and then arrange the mortgage on your behalf.
Finally, just like with any purchase, you will also need a solicitor, who will take care of the legal side of the transaction and work with you, the Right to Buy mortgage broker, your landlord and the mortgage lender to finalise the purchase.
You may have a Preserved Right to Buy if you were a secure council tenant when the council transferred the property ownership to another landlord, for example, a housing association.
It’s important to note that most housing association tenants do not have the Right to Buy. You only qualify for Preserved Right to Buy if the council transferred ownership of the property to the housing association while you were already a council tenant.
Preserved Right to Buy can also apply if you later moved to another property owned by the same landlord who took over the original one from the council. But it is not applicable if you move to a property owned by a different landlord, e.g. a different housing association or council.
Your landlord will be able to confirm whether you have the Preserved Right to Buy and. If you do, then you can buy your home in the same way as if you were still a council tenant.
If you are not eligible for Preserved Right to Buy, you may still be able to use the Right to Acquire scheme. Your landlord will be able to confirm it.
This scheme has similar eligibility criteria to Right to Buy, but it also requires
- the subject property to be built or bought by a housing association after 31 March 1997 (and funded through a social housing grant provided by the Housing Corporation or local council) or
- transferred from a local council to a housing association after 31 March 1997
- your landlord is registered with the Regulator of Social Housing.
The discount amount during the 2020/2021 tax year is £9,000 to £16,000 dependent on the area within England and is independent of whether the property is a flat or a house.
There are a few requirements that you will have to meet before you become eligible:
- be a council or housing association tenant for at least 3 years;
- use the subject property as your only or main home;
- you don’t have outstanding credit problems, i.e. you are not an undischarged bankrupt, don’t have a bankruptcy petition pending against you, don’t have an unsettled Individual Voluntary Arrangement (IVA) or debt relief order (DRO). Past settled/discharged credit issues can be accepted subject to Right to Buy mortgage lending criteria;
- you don’t have a possession order against you for some debt;
- the subject property is not due to be demolished.
After you meet these criteria, the only question remaining will be whether you can afford the purchase and get a suitable Right to Buy mortgage. This is where we come in.
We assess your Right to Buy mortgage options based on your circumstances and advise you as most appropriate. If you can get the required mortgage and would like to proceed, then we can also arrange it for you to make sure that you get the best Right to Buy mortgage deal.
Lenders consider the discount that you receive as equity you will have in the property. Because of this, some lenders don’t require any additional deposit from you and are happy to lend 100% of the discounted purchase price.
Some lenders can even lend a bit of extra on top of the discounted purchase price to cover your purchase-related costs (e.g. Stamp Duty Land Tax, solicitor fees) or even the cost of refurbishment.
Other lenders would still like to see that you put down 5-10% deposit from your savings and/or from a family gift.
As a whole of market independent broker firm, we have access to all the lenders who can offer 100% of the discounted purchase as well as those who require some deposit. With our help, you can be sure that you are getting the best Right to Buy mortgage deal.
If you sell the property within the first five years after buying it, then you will have to repay some or all of the discount you received as follows:
- If you sell within the first year of purchase – the whole discount amount will have to be repaid
- 2nd year – four-fifths of the discount amount is payable
- 3rd year – three-fifth of the discount amount is payable
- 4th year – two-fifth of the discount amount is payable
- 5th year – one-fifth of the discount amount is payable
If you sell the property within the first ten years, you will have to offer it to either your former landlord or to another social landlord in your area at full market value. If your offer has not been accepted within eight weeks, you will be free to sell the property on the open market.
During the pre-emption period, you are not supposed to rent out the property.
However, councils, housing associations and lenders all understand that “life happens” and you may meet a new partner, move in with them and would like to rent out your former home instead of selling it. Or you may get a new job somewhere far, and it won’t be practical for you to commute from the subject property or sell it and repay part of the discount amount.
In case of a genuine situation, you may receive a consent to let from both the council (or housing association) and the mortgage lender. The approval will make letting out the property legal, as you won’t be breaking your Right to Buy purchase and your Right to Buy mortgage contract terms.
At the same time, during the initial five years, mortgage lenders don’t normally accept remortgaging requests from residential to Buy to Let deals. In other words, if your circumstances change and you’d like to let the property out, but you can’t get a consent to let, you will find it difficult to remortgage onto a deal that allows you to rent out the property.
You will, however, be able to remortgage onto a Buy to Let mortgage deal after the five year pre-emption period.
If you buy a house, then building insurance will be mandatory to ensure that in case the structure is damaged (e.g. by fire, flood or movement), the insurance will cover at least the mortgage amount.
Nothing else is compulsory, but of course, it makes sense to cover costly unexpected events.
Contents insurance can pay for replacing your personal belongings if someone burgles your home, there is fire, you accidentally drop your new flat screen TV…and the list goes on.
If you’re planning to rent out your property then you should consider getting landlord insurance. Landlord insurance protects you as a landlord from risks associated with your rental property. It usually includes buildings and contents insurance, but can also include rental-property specific covers such as protection against loss of rent, and tenant default. It can also cover legal fees and compensation for damage or injury to the tenant due to the property.
Life insurance is a one-off payment if you were to die during the mortgage term, so the insurance can settle your mortgage. This would allow your family to stay in the property without worrying about mortgage payments at an already stressful time.
Critical illness cover
Critical illness cover would give you a lump-sum if you had a serious illness like cancer, heart attack or stroke as well as dozens of other conditions. This payment may or may not settle the mortgage, but it can help pay for treatment, let you take time off work while recovering or alter your home, if necessary.
Income protection is designed to give you a monthly income for some time in case you can’t work due to an accident or a long term illness. This covers mental health issues as well.
Of course, all the insurances come with terms and conditions, optional features and your medical history can influence your options.
To find the right insurance cover that fits within your budget, speak to our team today. We can compare the whole market, find the most suitable cover and apply on your behalf free of charge.
Independent mortgage brokers serving the entire UK
We don’t think you should waste time filling out forms that aren’t relevant to your mortgage needs.
That’s why we like to speak to you first and build a personal relationship, so you can remain assured you’re getting the best service.
Get personalised mortgage advice today
0208 323 8989
Latest mortgage best buys
|First time buyer|
|Type||2 year fixed|
|Type||2 year fixed|
|Type||2 year fixed|
|Buy to Let|
|Type||2 year fixed|
Lilla, has been absolutely amazing.
From start to finish, she always kept use informed on how the mortgage application was going.
We had a few issues with the application due to my... read more
I worked with Agnes and Lilla very closely to secure a mortgage offer for my very complicated case.
While so many other morgage brokers and big offices turned me down, BlueWing... read more
My mortgage advisor was Agnes Siry and she was absolutely brilliant from the very beginning up until the very end. She was always at the other end of the phone... read more
Such a good thing to have a peace of mind that my mortgage is really the best available one on the market and all the legal bits are in place.... read more
Really enjoyed working with Saanja and the team. They went above and beyond to help us and were creative with their solutions. I truly believe we could not have got... read more
Agnes was our guardian angel throughout our very first house purchase. It's a process that is full of questions, uncertainty and doubt and (at least for first time buyers) and... read more
Saanya was amazing from start to finish and got our mortgage through really quickly. She was extremely helpful with brilliant advice to help us purchase our flat, Ours was tricky... read more
Lilla assisted me with a contractor mortgage and she was absolutely wonderful... she is extremely patient and knowledgeable. I had a LOT of questions and there were some personal circumstances... read more
I highly recommend Lilla, Alexandra and the rest of the team. Out of all of the brokers I made enquiries to Lilla was the most thorough in the questions she... read more
Couldn't recommend Lilla and the team highly enough. Very friendly and thoroughly professional throughout our (occasionally!) stressful journey to secure a mortgage in these crazy times. Answered all of our... read more
I went through a number of less-than-helpful mortgage advisors before Lilla was recommended to me by a friend.
From the start the service provided was outstanding. Both Lilla and Alex were... read more
If it would be possible then I would give 10 stars out of the 5.
Lilla Dilliway is the best mortgage broker ever, very experienced, always available and has all the... read more
I would highly recommend the services of BlueWing Financials and would especially like to thank Lilla and Alexandra, our case handles.
I was in the process of purchasing my first... read more