Right to Buy
Right to buy is a government scheme designed to help tenants in council housing to buy their homes with often rather large discounts.
Often, the discounts offered can be used against the upfront deposit costs, meaning that those who can afford the mortgage can purchase their property without paying any deposit at all.
How does right to buy work?
The idea behind right to buy is to allow those living in public sector housing to buy their homes at a discount.
Public sector here refers to any housing association, local council or other government department.
The size of the discount is dependent on the length of time you’ve spent in the house in question, the type of property involved (e.g. a flat or a house) and, of course, the value of the property.
As of July 2015, the maximum discount is £103,900 in London, and £77,900 in the rest of the country.
Who qualifies for right to buy?
In order to qualify for right to buy you simply need to have been a public sector tenant for three to five years. Importantly, you do not have to have been living in the same property for this whole period, nor does the period have to be continuous. So long as you have accrued the right number of years in public sector housing throughout your life, you will be eligible.
If you live in a council house (rather than a flat), and have done for three to five years, then you’ll get a 35% discount under right to buy. This discount will go up by 1% each year until the maximum discounts mentioned above are met.
If you live in a flat, you’ll get a 50% discount if you’ve lived there for three to five years and then the discount will increase by 2% each year after that.
If you’ve lived with someone for at least 12 months, or if you’re both joint tenants on the agreement, then you’ll both be eligible to apply for a right to buy discount to purchase the property in question together.
Right to Buy Mortgages
Even with the right to buy discount, having enough money set aside to buy a home outright can be tricky, so it’s likely that you’ll need to take out a mortgage to do so.
Many lenders will allow you to use the right to buy discount as a mortgage deposit, meaning that in some cases you’ll be able to borrow enough to purchase the house without needing to offer any money up front.
This is not always the case though so you should always speak to mortgage providers or brokers to see what options you have available.
If you talk to mortgage providers directly, then you’ll only get information on products from one particular lender. If you want a broader range of options however, head over to our mortgage comparison page and you’ll have your pick of the best mortgage plans on the market, helping you borrow as much as you need at the lowest cost possible.
Selling a Right to Buy Property
You are welcome to sell the property bought through right to buy at any point, but if you do so within five years then you will most likely have to pay back some or all of the discount you enjoyed at the start.
If you sell up within ten years, then you’re obliged to offer the property back to your original landlord and only if they decline the offer can you actually put it on the open market.