What is Right To Buy?
The Right to Buy scheme allows local authority tenants to purchase their homes at a heavily discounted price if they have been in residence for a long period of time.
Right to Buy was first introduced by Margaret Thatcher through the Housing Act 1980 to allow most council tenants to buy their council property at a discount.
How does Right to Buy work today?
Right to Buy is offered to tenants of council authorities, registered social landlords with secure tenants, fire authorities, passenger transport executives, Government Departments, the NHS and a range of other public bodies. And a recent change in 2016 saw the introduction of the Right to Buy scheme being offered to housing association tenants.
The Right to Buy scheme allows tenants to buy their home at a minimum discount of 35% of the market value for a house or 50% for a flat after 3 years of residency. For longer standing tenants with more than 5 years of occupancy, an additional 1% discount is applied for each additional year for a house up to 70%.
For flats, an additional 2% discount is applied per year up to a maximum of 70%. The maximum discount is ￡78,600 across England and ￡104,900 in London boroughs.
Who is eligible to apply for Right to Buy?
Under the current rules, you can apply to buy your council home if:
It’s your only, or your main home.
It’s a self-contained property with its own kitchen, toilet and bathroom.
You’re a secure tenant and there’s a legal contract between you and the landlord.
You’ve had a public sector landlord such as a council or NHS trust for 3 years.
A joint application can me made with someone who shares your tenancy or up to 3 family members who have lived with you for the past 12 months.
- If your home was owned by the council in the past and they sold it to another landlord whilst you were living in it, you may still have the Right to Buy. This is called ‘Preserved Right to Buy’. Ask your landlord if this applies to you.
Is Right to Buy available in all areas?
The full Right to Buy scheme is only available in England. To find out whether Right to Buy is offered in your area of the UK, please visit the government’s Right to Buy webpage.
Getting a Right to Buy mortgage
There is no specific mortgage for Right to Buy buyers. You will need to go through the same mortgage process as anyone else buying a property.
If you have decided to buy a property using the Right to Buy scheme, research how much you will likely be able to borrow, how much you can afford to pay back each month and the mortgage types available to you.
There are many costs involved with buying a house such as mortgage fees, solicitors fees and stamp duty so be sure to do your sums and make sure you can afford to be a homeowner. Read our guide to mortgage fees for further information.
Factor in additional ongoing costs such as maintenance and repairs and if you are buying a flat, you will most likely be a leaseholder and will need to pay an annual service charge.
And finally, consider that you won’t be eligible for housing benefit if you become a homeowner.
In summary
If you’re considering buying your home under the Right to Buy scheme, use our range of easy to use calculators for an indication of how much you can borrow and how much you can afford to repay.
Do your research on mortgage types and don’t hesitate to speak to one of our advisers who will be happy to help
