Mortgage Advisor & Director
Mortgage Advisor & Director
It can be difficult for today’s first-time buyer to get onto the property ladder, with high property prices and large deposit requirements. The good news is, there are a range of homeownership schemes to help those struggling to buy their first home. Here, we look at a scheme specifically for council tenants: Right to Buy.
What is a Right to Buy mortgage?
The Right to Buy scheme is one of the longest-standing government mortgage schemes in the UK. There is not one specific Right to Buy a mortgage, but this term is often used to refer to mortgages that can be used alongside the scheme.
Right to Buy allows certain council tenants in England to buy their rented home at a discount on the market value. The size of the discount depends on how long you’ve been a public sector tenant and the type and value of your property.
Some lenders allow you to use the Right to Buy discount as a deposit, which can make it easier to qualify for a mortgage, as the repayments are lower, the less you borrow.
How much discount you could get
To buy a flat you get a 50% discount if you’ve been a tenant for 3-5 years, from 6 years tenancy, you’ll get an extra 2% for each additional year of tenancy.
To buy a house you get a 35% discount if you’ve been a tenant for 3-5 years, from 6 years tenancy, you’ll get an extra 1% for each additional year of tenancy,
These do not have to be consecutive years at the same address, so you could have been in your current home for 1 year and spent 2 years as a public tenant elsewhere, and still qualify. However, the discount may be reduced if you’ve used the scheme previously. You may also have to repay some or all of it if you sell your home within 5 years.
Discounts per region
A maximum discount applies per region, regardless of your property type, as below:
Whichever is lower, 70% of your property value, or the regional limit for your area
|
Region |
Max discount limit |
Additional info |
|
North East |
£22,000 |
N/A |
|
North West |
£26,000 |
N/A |
|
Yorkshire and the Humber |
£24,000 |
N/A |
|
East Midlands |
£24,000 |
N/A |
|
West Midlands |
£26,000 |
N/A |
|
Eastern |
£34,000 |
The discount is reduced to £16,000 in Watford district |
|
South East |
£38,000 |
The discount is reduced to £16,000 in Reading, West Berkshire, Hart District, Oxford and Vale of the White Horse District, Tonbridge and Malling, Epsom and Ewell and Reigate and Banstead |
|
London |
£16,000 |
The discount increases to £38,000 in Barking and Dagenham, and Havering |
*If you applied to buy your home before 21 November 2024 you would have been entitled to larger discounts, which still apply. The discounts above apply to all applications received from 21 November 2024 onward.
Criteria for the scheme
To qualify for the Right to Buy scheme you will need to meet the following criteria:
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A secure tenant
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Your public sector rented home must be self-contained and your only home
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You must have had a public sector landlord for a total of 3 years - this might be your local council, a housing association or an NHS trust. This doesn’t need to be 3 years in a row and can be made up of multiple tenancies with different public sector landlords
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You are the spouse, civil partner or another relative who shares the tenancy or residency with the secure tenant applicant
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You don’t have any serious debt issues, such as bankruptcy that has not yet been discharged, a possession order, or a debt relief order
Deposit requirements
It’s possible to get a Right to Buy mortgage with no deposit, as many lenders will allow you to use the scheme discount in lieu of a deposit. However, keep in mind that not all lenders allow for this, so it’s important to take advice about which lender is best suited to your needs.
It’s also worth keeping in mind that the level of discount you qualify for may not completely cover the deposit, depending on the property value. It’s worth considering saving towards a deposit if possible, as the larger the deposit, the better the mortgage rates available to you should be.
How to apply for a Right to Buy mortgage
Right to Buy mortgages have the same application process as any other mortgages, however, it’s a good idea to ensure you qualify for the scheme before you apply.
You can apply for the Right to Buy scheme through the government website. It’s worth speaking to a mortgage broker to see what mortgages are available for Right to Buy scheme applicants, so that you get an idea of the size of deposit you might need, and whether your discount would cover it. You can compare the latest mortgage rates for free below or choose the option to get started with one of our brokers if you need expert advice before you begin:
Compare Right to Buy mortgage rates for FREE
Which lenders are available?
There are no specific Right to Buy mortgage lenders, but there are only certain lenders that will accept mortgage applications from those buying through the Right to Buy scheme. Some have specific products within their range to be used with the scheme, whereas others are happy to accept scheme applicants on their standard mortgage range.
There are a few high street banks, but it’s mostly Building Societies offering Right to Buy mortgages in the UK. Below are some examples of lenders who may consider your application:
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NatWest - Offers Right to Buy mortgages of up to 90% LTV on the market value of the property, or up to 100% of the discounted price
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Barclays - will lend up to 80% LTV of the market value or up to 95% of the discounted price
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Leeds Building Society - Offers up to 100% of the discounted price or 75% LTV of the property value
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Kensington Building Society - Has specific Right to Buy mortgages of up to 100% of the discounted purchase price, or up to 75% LTV of the market value for both employed and self-employed applicants
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Virgin Money - Offers up 85% LTV of the actual market value, and not more than the discounted purchase price on Right to Buy properties. All applicants must also be named on the Right to Buy papers
Keep in mind that qualifying for the Right to Buy scheme won’t necessarily mean you qualify for a mortgage - you’ll need to meet the criteria of the individual lender you approach. We can help you to compare the most suitable Right to Buy mortgage lenders for your needs.
How much you could borrow
Most lenders offer between 4 and 5 times your annual income, but this will depend on your circumstances, and how much deposit you have.
Our mortgage calculator can help you to gauge how much you might be able to borrow based on your personal finances.
Why choose Teito for your Right to Buy mortgage?
If you’re looking for Right to Buy mortgage advice and to compare the Right to Buy mortgage rates for free, then you’ve come to the right place. At Teito, we can help you with all elements of your Right to Buy purchase, from the scheme application, through to securing you the best Right to Buy mortgage for your circumstances.
Take advantage of your first, no-obligation chat with one of our mortgage advisers, absolutely free of charge, today!
Here are just some of the reasons other Right to Buy applicants came to us for their mortgage needs:
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We help applicants using all sorts of home ownership schemes, including the Right to Buy scheme, every day
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You can compare the latest mortgage rates with us in seconds
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We are 5-star rated on leading review websites
Ready to compare the latest mortgage rates and book in a free, no-obligation chat with a broker who specialises in the Right to Buy scheme? Get started here.
FAQs
If you have bad credit, you may still be able to get a mortgage to use alongside the Right to Buy scheme, but it depends on the severity of your credit issues. Some lenders are more flexible than others with their criteria, so it’s worth speaking to us if you’re concerned about your credit history.
Keep in mind that if you have severe debt issues you may not qualify for the Right to Buy scheme, regardless of whether you could get a mortgage.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.