Right to Buy Mortgages Explained

How is the Discount Worked Out?

If you are a local authority tenant you may be eligible for a Right to Buy mortgage. The purchase price is calculated by applying a discount from the open market value. The percentage discount you receive is determined by how long you have been a tenant for. 

Some lenders allow you to apply for extra money for home improvements when you take out a Right to Buy mortgage. You may need to provide estimates for the works required. It can be more difficult to obtain a Right to Buy mortgage with bad credit but it’s not impossible. 

Right to Buy FAQ’s

The history of the Right to Buy Scheme

Originally being introduced back in the ’80s the UK Right to Buy scheme is still very much alive and well for tenants who wish to buy their council home at a discount. 

The scheme has undergone changes since then, with schemes existing in various local authority areas across the nation that may allow tenants to use Right to Buy with Housing Associations too. Thousands of tenants over the years have taken advantage of the Right to Buy to become Homeowners. 

How does Right to Buy work? 

The Right to Buy Scheme allows tenants to buy their property from their local Council for a discounted price. The amount of discount that you receive depends on how long you’ve lived there. You must have been a public sector (Council, Housing Association or NHS Trust) tenant for at least three years and the longer you have been a tenant the more discount you will get. 

Do you need a deposit for Right to Buy? 

No, lenders will accept the right to buy discount as your deposit. It is still worth remembering that you may need to have some of your own money saved for any fees that are incurred. 

Can my children buy my Council home for me? 

Any family member is able to buy your council home, providing they have been signed onto the tenancy for at least 1 year. If you are married or have a civil partner, providing they already live with you, they can also have tenancy transferred to them. At that point, they would be eligible for the Right to Buy scheme in that home. However, it would be in their name, not yours. 

Can you buy your Council house if you’re on benefits? 

Being on any form of benefits will not change your legal Right to Buy eligibility. However, any lender will need to make sure you are able to afford your monthly mortgage repayments. 

One thing that may be affected is your ability to receive certain benefits, such as housing benefits, which cannot be received if you are a homeowner. 

Written by
Malcolm Davidson
Managing Director of UK Moneyman Ltd.
MAQ & CeRER Qualified

15th November 2023

About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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