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Everything You Need to Know About Right to Buy - Buying Your Council Property

Buying your own home when you’re living in a rented property can be challenging.

But if you’re a council tenant, the Right to Buy scheme gives you the opportunity to get your foot on the property ladder by buying your council home at a discounted price. With the help of a mortgage broker, you can find the right mortgage lender to suit your Right to Buy discount, type of property, and personal circumstances.

Am I Eligible for the Right to Buy Scheme?

You can apply for the Right to Buy your council home if all the following apply:

  • The property is your only or main home.
  • It’s self-contained, meaning you don’t share a bathroom or kitchen with another household.
  • You’re a secure tenant (most council tenants are). This simply means you can live in the property for the rest of your life, provided you don’t break tenancy conditions.
  • You’ve had a public sector landlord (such as a council, housing association or NHS trust) for three years. This doesn’t have to be three years in a row.

With the Right to Buy scheme, you can also apply for a joint mortgage. You can do this with your current housemate, or with up to three family members you’ve lived with in the past year.

What Discount Do I Get Through Right to Buy?

You might be entitled to a discount, but there’s no guarantee. For example, the council can’t sell you a property below the value of the total cost they’ve spent on purchase, building, improvements or repairs.

In most cases, you can get a discount. There are a few different ways an extra discount is worked out. These include the property’s value, how long you’ve been a tenant at council, housing association or armed forces properties, and the type of property you live in.

If You Live in a House:

  • Up to year five of your tenancy, you could get a 35% discount on your property’s value.
  • From year six of your tenancy, this discount increases by 1% every year (to a maximum of 40 years and a 70% discount). If you live in a flat, or maisonette:
  • Up to year five of your tenancy, your discount could be 50% of your property’s value.
  • From year six of your tenancy, this discount increases by 2% every year (to a maximum of 15 years and a 70% discount).

Currently, the maximum council property discount through Right to Buy in England is £84,200 (£112,300 in London).

Could Anything Affect my Discount?

Yes. Firstly, if you, or someone you’re applying for a joint mortgage with, have previously received a discounted sale on a council property, that amount would be deducted from the discount you receive this time.

Secondly, the discount could be reduced by the ‘Cost Floor rule’. This rule means your landlord can claim money from your Right to Buy discount that’s equal to the money they’ve spent on maintenance and repairs at your property over the past 15 years. It doesn’t matter if you haven’t lived at the property for that full period of time: they can still claim from your Right to Buy discount.

Finally, if you have been declared bankrupt, you won’t be eligible for a Right to Buy discount.

How Do I Apply?

You need to download an RTB1 application form and send it to your landlord (trufe can help you with this). Your landlord has four weeks (eight if you’ve been a tenant for fewer than three years) to tell you whether you can purchase your council property.

If your landlord is happy to sell your home to you, they’ll send you an offer known as a Section 125 notice. This is a formal valuation of your property, including:

  • The price you'll be expected to pay
  • Property details, including any known problems.
  • The Right to Buy discount rates.
  • Estimates of any charges that will be deducted from your discount.

You have 12 weeks from receiving your Section 125 notice to either accept the offer, or reject it and continue renting your home.

You can ask for an independent valuation from HMRC if you feel the property value is too high. To do this, you will need to write to your landlord within three months of receiving the offer to explain why you think this.

How Can I Raise the Money for a Mortgage?

There are many Right to Buy mortgages available through different lenders. Start with our trufe mortgage calculator. This will tell you how much you can borrow on your current earnings, how much your monthly repayments will be and, most importantly, if you can afford this.

The mortgage calculator is a guide, but it’s a great starting point to see what you might be able to afford. It also takes into account the whole market. As trufe is a mortgage broker, we’re not tied to any mortgage lender’s deals, so we can search the market for the most suitable Right to Buy mortgage for you.

Why Should I Talk to a Broker?

The only Right to Buy mortgage a mortgage lender can offer you is one they currently sell. This means they’re limited only to what their company provides, whether or not that’s suitable for you.

At trufe, we have an objective view of the whole market. That means we can show you a range of options based on what’s right for you, with no obligation, no bias, and no selling tactics.

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Can I Use my Right to Buy Mortgage Discount as a Deposit?

Yes, most of the time. Many mortgage lenders will let you use your Right to Buy discount as your deposit. However, this isn’t always the case. A mortgage broker can show you which lenders accept Right to Buy discounts as property purchase deposits.

I have Bad Credit. Can I Still get a Right to Buy Mortgage?

Yes, but you might find it more difficult. Some lenders may disqualify you if you have legal problems with bad credit debt. A mortgage broker can point you towards the lenders who are more likely to support your application.

I’m Self-Employed. Do I Qualify for a Right to Buy Mortgage?

Yes, but you’ll need to prove your income. The number of years’ proof you need depends on your mortgage lender, so it’s worth talking to a mortgage broker to find out which lender which suits your circumstances.

What happens if I decide to sell my ex-council home after I’ve bought it through Right to Buy? If you sell your home within five years, you might have to repay some - or all - of your discount. If you sell your property within 10 years, you must give your original landlord first refusal to buy the property.

Is Right to Buy an Option if I Live Outside England?

Northern Ireland still offers Right to Buy, but with a maximum discount of £24,000. Scotland and Wales have ended their Right to Buy schemes.

There’s a lot of information to digest with Right to Buy, and finding a mortgage lender who meets your specific needs can be a challenge when you tackle it alone.

When you talk to trufe, our unbiased position as mortgage brokers gives you an objective overview of the market so we can help you find the Right to Buy mortgage that’s the most suitable deal for you, whatever your personal circumstances.

For the latest information for the Government’s Right to Buy scheme, visit the Government page.

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