Right to Buy Mortgages
Right to Buy lets eligible council and housing association tenants purchase their home at a substantial discount to market value – and in many cases, that discount can be used in place of a cash deposit, making homeownership achievable without significant savings.
What Is the Right to Buy Scheme?
Right to Buy is a government scheme available in England allowing eligible council tenants, and some housing association tenants under the related Right to Acquire scheme, to buy their rented home at a discount based on how long they’ve been a tenant and the type of property. There is currently no equivalent scheme in Wales, Scotland, or Northern Ireland, though each offers its own alternative home ownership routes.
Who Is Eligible
To qualify, the property must be your only or main home, you must be a secure tenant, and you’ll typically need at least three years of public sector tenancy – which doesn’t need to be continuous or in the same property. The property must not be due for demolition or subject to a legal order preventing sale.
Right to Acquire: The Housing Association Equivalent
Some housing association tenants qualify under a related but distinct scheme called Right to Acquire, generally offering smaller discounts than Right to Buy and applying to properties built or acquired using public subsidy after a certain date. If you’re unsure which scheme applies to your specific property, it’s worth checking directly with your housing association, since the eligibility rules and discount structure differ from standard Right to Buy.
How Much Discount You Can Get
Discount levels depend on the property type and length of tenancy. For houses, the discount starts at 35% after three years and increases by 1% for each additional year, up to a maximum of 70%. For flats, it starts at 50% after three years and increases by 2% per additional year, also capped at 70%.
Regional Discount Caps
Regional caps limit the maximum cash value of the discount regardless of the percentage, and these caps vary by region – rules changed for applications made on or after 21 November 2024, so it’s worth confirming the current cap for your specific area on GOV.UK rather than relying on older figures.
If Your Landlord Has Recently Invested in Your Home
If your landlord has spent money building or maintaining your home within the last 30 years, your discount may be reduced, with the exact reduction depending on when you apply and how much was spent. Your landlord will confirm this as part of the process.
Using the Discount as Your Deposit
One of the most significant advantages of Right to Buy is that most specialist lenders will accept the discount in place of a cash deposit, meaning you may be able to buy your home with little or no savings. Many lenders will lend up to 95%, and some up to 100%, of the property’s purchase price once the discount is applied.
Worked Example
If your council flat is valued at £180,000 and you qualify for a 40% discount, your discount is £72,000, leaving a purchase price of £108,000. That £72,000 discount can typically act as your deposit, giving you a loan-to-value of 60% on the mortgage itself – a level that generally unlocks more competitive rates than a much higher loan-to-value would.
The Right to Buy Application Process
Step 1: Check Your Eligibility
Confirm your eligibility using the official GOV.UK Right to Buy portal before proceeding further.
Step 2: Submit Your RTB1 Application
Complete the RTB1 Notice and send it to your landlord to formally apply.
Step 3: Await Your Landlord’s Response
Your landlord typically has four weeks to respond, extended to eight weeks if you’ve been a tenant for less than three years with them specifically.
Step 4: Receive Your Section 125 Notice
If approved, you’ll receive a formal offer – a Section 125 Notice – detailing the property’s valuation, your discount, and the resulting purchase price. This is the key document your mortgage lender will use to assess your application, typically issued within eight weeks for a house or twelve weeks for a leasehold property.
Step 5: Arrange Your Mortgage
With your Section 125 Notice in hand, you can proceed with a mortgage application for the remaining balance after your discount.
Step 6: Legal Completion
Once your mortgage offer is issued, your solicitor handles the legal completion process alongside your landlord’s legal team, similar in principle to any standard property purchase, though with the added documentation specific to Right to Buy.
The Five-Year Discount Repayment Rule
If you sell your property within five years of purchase, you’ll need to repay some or all of the discount you received, on a sliding scale that reduces the closer you get to the five-year mark. This is worth understanding clearly if there’s any possibility you might need to sell relatively soon after buying.
How the Sliding Scale Typically Works
The repayment obligation reduces year by year – selling in year one typically requires repaying the largest proportion of the discount, reducing progressively each year until the obligation disappears entirely once you’ve owned the property for five years. It’s worth getting the exact current figures for your specific situation from your landlord or solicitor, since precise percentages can vary.
Non-Standard Construction: A Common Complication
A significant number of council homes were built using concrete, pre-fabricated, or other non-standard construction methods, and many mainstream lenders won’t offer mortgages on these property types regardless of Right to Buy eligibility. Our Non-Standard Construction Mortgages page covers this specific complication in detail, including which construction types are most affected and how lenders assess them. It’s worth checking your specific property’s construction type early, since this can meaningfully narrow your realistic lender options.
How Many Lenders Offer Right to Buy Mortgages
Over 40 lenders currently consider Right to Buy applications, including some high street names, though each applies its own additional criteria – some only lend on houses rather than flats, and others cap the loan-to-value differently. Working with a broker who understands this specific market helps identify which lenders are genuinely likely to accept your application.
Leasehold Flats and Service Charges
If you’re buying a flat through Right to Buy, you’ll typically hold it on a leasehold basis, meaning ongoing service charges apply for building maintenance, insurance, and communal areas. It’s worth understanding these ongoing costs clearly before committing, since they continue indefinitely alongside your mortgage payment, and some ex-council blocks have faced significant one-off charges for major works like roof or lift replacement.
Major Works Charges Specifically
As a leaseholder, you can be liable for a share of significant one-off maintenance costs decided by the freeholder, which can sometimes run into thousands of pounds with limited notice. It’s worth asking about any planned major works before completing your purchase, since this is a genuine financial risk specific to leasehold ownership that a house purchase wouldn’t carry.
Comparing Right to Buy Against Other Home Ownership Routes
If you don’t currently qualify for Right to Buy, or your specific property isn’t eligible, it’s worth being aware that other government-backed home ownership schemes exist, such as shared ownership, which work on a genuinely different basis – buying a percentage share of a property rather than the whole thing at a discount. These aren’t interchangeable options, and it’s worth understanding which one genuinely applies to your situation rather than assuming they work the same way.
What If You’re Declined by a Lender?
Given Right to Buy properties, particularly non-standard construction ones, can be declined by some lenders, it’s worth not treating a single decline as the final word – our Declined Mortgages page covers the wider process of understanding a decline and building a stronger case, and working with a broker who has access to the wider specialist Right to Buy lending market often uncovers options a single direct application wouldn’t have found.
Improvements and Renovations After Purchase
Once you own your property, you’re free to carry out improvements and renovations subject to normal planning and building regulations, unlike as a tenant where alterations typically require landlord permission. If you’re planning significant works shortly after purchase, it’s worth discussing financing options for this with your broker at the same time as your Right to Buy mortgage, since combining the planning can be more efficient than treating them as entirely separate projects.
Documents You’ll Need
Beyond standard mortgage documentation – proof of identity, address, and income – you’ll need your Section 125 Notice showing the official valuation and discount, which forms the basis of your mortgage application.
Frequently Asked Questions
How much discount can I get through Right to Buy?
Up to 70% of the property’s value, depending on the property type and length of tenancy, subject to regional caps on the maximum cash value.
Can I use my discount instead of a cash deposit?
Yes – most specialist lenders will accept the discount in place of a deposit, and some will lend up to 100% of the purchase price as a result.
What happens if I sell my home within five years of buying it?
You’ll need to repay some or all of the discount on a sliding scale, reducing the closer you are to the five-year mark.
Will every lender accept a Right to Buy mortgage on my property?
Not necessarily – non-standard construction properties, common among ex-council housing, can limit your options to specialist lenders, and criteria vary considerably between the 40+ lenders who consider this scheme.
What’s the difference between Right to Buy and Right to Acquire?
Right to Buy applies to council tenants; Right to Acquire is the equivalent scheme for many housing association tenants, generally offering smaller discounts.
Do I need to worry about service charges if I buy a leasehold flat?
Yes – ongoing service charges and potential major works costs apply to leasehold ex-council flats, worth understanding clearly before committing.
Can I renovate my property after buying it through Right to Buy?
Yes, subject to normal planning and building regulations – you’re no longer restricted by landlord permission once you own the property.
What if my mortgage application is declined?
A single decline isn’t necessarily the final word – a broker with access to the wider specialist Right to Buy lending market can often identify alternative options.
Get in touch once you’ve confirmed your eligibility and received your Section 125 Notice, and we’ll help you find a lender genuinely suited to your property and circumstances.
