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A Right to Buy mortgage allows eligible public sector tenants to purchase their property from the local authority or housing association, without needing a traditional deposit.
If you’ve been a tenant for at least three years, you may be eligible to buy your property at a discounted price.
It has been available in different forms since the 1980s and is still in use across many parts of the UK today.
Although the scheme has changed over the years, many people still use it to move from renting to owning. Here’s how it works and what to be aware of if you’re considering this route.
Right to Buy Mortgages
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How Is the Discount Calculated?
The longer you’ve been a tenant, the bigger the discount you may receive. The amount is worked out as a percentage of the property’s current open market value.
For many, this discount is substantial enough to replace a traditional deposit. It’s worth checking with your local authority to confirm the amount you’re entitled to and whether it applies to your home.
Do You Need a Deposit for a Right to Buy Mortgage?
In most cases, no. Many lenders accept the Right to Buy discount itself as the deposit. That means you might not need to put down any of your own money towards the purchase.
Even if the deposit is covered, it’s still a good idea to have some savings set aside for legal fees, mortgage costs, and any initial work needed on the property.
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Can You Borrow Extra for Home Improvements?
Some lenders may allow you to borrow additional funds alongside your Right to Buy mortgage to carry out home improvements.
You’ll usually need to provide estimates for the work planned, and this borrowing must still meet standard affordability criteria.
This can be a helpful option if the property needs modernising, or if you’re hoping to add value through upgrades.
What If You Have Bad Credit?
It can be more challenging to get a Right to Buy mortgage with a poor credit history, but it’s not out of the question.
Some specialist lenders are willing to assess each case individually and may consider your application based on recent stability and overall affordability.
Having a broker on your side helps in these cases, as we know which lenders are open to Right to Buy applicants with previous credit issues.
Can Someone Else Buy the Property on Your Behalf?
Family members can sometimes buy the home with you, but they must meet certain conditions. For example, they usually need to have been named on the tenancy for at least one year.
In cases where a partner or spouse already lives with you, they may be eligible to apply in your place if the tenancy is transferred to them.
It’s important to speak to your local authority about the rules that apply in your situation.
Can You Still Apply If You’re on Benefits?
Being on benefits does not automatically disqualify you from using the Right to Buy scheme. However, lenders will need to confirm that you can afford the monthly repayments on the mortgage.
Also, bear in mind that some benefits, such as housing benefit, may stop if you become a homeowner, so it’s worth getting financial advice to understand the full picture before you apply.
How We Help With Right to Buy Mortgages
Buying your council or housing association property is a major step, even with a discount in place. Our mortgage advisors understand how the Right to Buy process works and what lenders expect.
We’ll help you understand your eligibility, calculate how much you can borrow, and support you from your first enquiry through to completion.
Whether you’re applying on your own, with family, or managing a more complex situation, we’re here to make the process simpler.
