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Getting onto the property ladder can feel like a big ask, with high house prices and large deposits standing in the way. But if you rent your home from the council, you might be closer to owning it than you think.
The Right to Buy scheme lets eligible council tenants in England buy their home at a discount, and many lenders will let you use that discount in place of a deposit. In this guide, we'll walk you through how it works, how much you could save, which lenders can help, and the changes coming to the scheme.
What is a Right to Buy mortgage?
Right to Buy is one of the longest-running government home ownership schemes in the UK. There isn't a specific "Right to Buy mortgage". The term simply describes a mortgage used to buy your home through the scheme.
Your council offers to sell you your home for less than its market value. The size of the discount depends on how long you've been a public sector tenant, whether you live in a house or a flat, what your home is worth and where you live.
The good news is that many lenders treat your discount as your deposit. That means you may be able to buy without any savings, and you'll be borrowing less than the home is worth.
Right to Buy, Right to Acquire and Preserved Right to Buy: what's the difference?
These three schemes are easy to mix up. Here's which one might apply to you:
Right to Buy is for council tenants with a secure tenancy.
Preserved Right to Buy is for tenants whose council home was transferred to another landlord, such as a housing association, while they were living there.
Right to Acquire is for housing association tenants. It only applies to homes built or bought by a housing association after 31 March 1997 (or transferred from a council after that date). It offers a fixed discount of £9,000 to £16,000 depending on where you live.
Not sure which applies to you? Your landlord can tell you.
Who can apply for Right to Buy?
To be eligible, you'll need to meet all of the following:
You're a secure tenant.
The property is your only or main home.
The property is self-contained.
You've had a public sector landlord for at least 3 years in total. This could be a council, housing association, NHS trust or the armed forces. The 3 years don't need to be in a row or at the same address.
Buying with someone else
You can make a joint application with:
someone who shares your tenancy, and/or
up to 3 family members who've lived with you for the past 12 months, even if they're not on your tenancy.
If you buy jointly, your discount is based on whoever has been a public sector tenant the longest. Many lenders require everyone on the mortgage to also be named on the Right to Buy paperwork, so plan this before you apply.
When you might not qualify
You usually won't be able to use Right to Buy if:
you're being made bankrupt or have an undischarged bankruptcy
a court has ordered you to leave your home (a possession order)
you have certain other serious debt issues, such as a
debt relief order
Speak to an expert
How much discount could you get?
- Houses: You'll get a 35% discount if you've been a public sector tenant for 3 to 5 years. After 5 years, it goes up by 1% for every extra year.
- Flats: You'll get a 50% discount if you've been a public sector tenant for 3 to 5 years. After 5 years, it goes up by 2% for every extra year.
You may get a smaller discount if you've used Right to Buy before.
Maximum discounts by region
Your discount is capped at whichever is lower: 70% of your home's value, or the limit for your region:
Region | Maximum discount | Exceptions |
North East | £22,000 | N/A |
North West | £26,000 | N/A |
Yorkshire and the Humber | £24,000 | N/A |
East Midlands | £24,000 | N/A |
West Midlands | £26,000 | N/A |
East of England | £34,000 | £16,000 in Watford |
South East | £38,000 | £16,000 in Reading, West Berkshire, Hart, Oxford, Vale of White Horse, Tonbridge and Malling, Epsom and Ewell, and Reigate and Banstead |
South West | £30,000 | N/A |
London | £16,000 | £38,000 in Barking and Dagenham, and Havering |
These caps apply to applications made from 21 November 2024. If you applied before then, the older, higher caps still apply: £136,400 in London and £102,400 elsewhere.
What this looks like in practice
Because the caps are now quite low, most buyers will find the cap decides their discount, not the percentage.
Example: Sarah has been a council tenant for 12 years, and her house in the North West is valued at £180,000. Her percentage discount would be 42% (£75,600), but the North West cap is £26,000. So she would pay £154,000.
If your landlord has spent money on your home
If your landlord has spent money building, buying or maintaining your home in the last 30 years, your discount may be reduced. This stops the price falling below what they've spent. Your landlord's offer will show exactly how your discount has been worked out.
Big changes are coming to Right to Buy
The government has confirmed further reforms, which are going through Parliament as part of the Social Housing Bill. The main proposed changes are:
Longer wait to qualify: 10 years as a public sector tenant, instead of 3.
Smaller discounts: Starting at 5% of your home's value, rising by 1% a year to a maximum of 15% (or the regional cap, if lower).
Longer repayment window: If you sell within 10 years (instead of 5), you may have to repay some or all of your discount.
New homes protected: Newly built social homes would be exempt for 35 years.
Speak to an expert right to buy mortgage broker to take advantage of the current discounts before they expire.
"The proposed reforms to this scheme would raise the qualifying period from 3 years to 10 and cut discounts to between 5% and 15% of the home's value. They aren't law yet, so today's rules still apply. If you're already eligible and buying makes sense for you, it's worth getting advice now so you understand your options before anything changes."
Neil Mulhearn Do you need a deposit?
Often, no. Many lenders accept your discount in place of a cash deposit and will lend up to 100% of the discounted price. But, there's one catch. Lenders also cap lending at a percentage of the home's full market value, usually between 75% and 90%. If your discount doesn't cover the gap, you'll need some savings to make up the difference.
Take Sarah's example: she's paying £154,000 for a home worth £180,000, which is about 86% of the market value.
A lender that goes up to 90% of market value could lend the full £154,000, so no deposit is needed.
A lender capped at 85% could only lend £153,000, so she'd need around £1,000 of her own money.
If you can add some savings, it's often worth it, as more equity usually means better rates.
Which lenders offer Right to Buy mortgages?
There are no dedicated Right to Buy lenders, but plenty of banks, building societies and specialist lenders accept Right to Buy purchases. Here are some examples:
NatWest: Up to 100% of the discounted price, capped at 90% of market value. Repayment mortgages only, and the names on your Right to Buy paperwork must match the application.
Barclays: Up to 100% of the discounted price, capped at 90% of market value. Lower limits apply to higher-value homes.
Nationwide: Up to 100% of the discounted price, and may lend extra for home improvements and a small amount towards legal fees.
Virgin Money: Up to 85% of market value, and no more than the discounted price. All applicants must be named on the Right to Buy papers.
Building societies and specialist lenders: Some can be more flexible with self-employed income or past credit problems.
Lender criteria change regularly, so treat this as a guide. Being eligible for Right to Buy doesn't guarantee a mortgage. You'll still need to pass each lender's affordability and credit checks.
How much could you borrow?
Most lenders will lend between 4 and 5 times your annual income. For example, on a household income of £40,000:
4 times income: around £160,000
4.5 times income: around £180,000
5 times income: around £200,000
What you can actually borrow depends on your outgoings, credit history and the lender's rules. Remember, you only need to borrow the discounted price, which can make buying more achievable than on the open market.
How to buy your home through Right to Buy
1. Check you're eligible and get mortgage advice - Make sure you meet the criteria above, and ask your landlord if you're not sure. It's also worth speaking to a mortgage broker early, so you know what you could borrow and whether your discount covers the deposit.
2. Apply to your landlord - Fill in the Right to Buy application form (the RTB1 notice) and send it to your landlord. Keep a copy. They must reply within 4 weeks, or 8 weeks if they've been your landlord for less than 3 years. If they say no, they have to tell you why.
3. Review your offer - If your landlord agrees, they'll send you an offer within 8 weeks for a house, or 12 weeks for a flat. It shows the price, your discount, any known problems with the property and, for flats, estimated service charges. You then have 12 weeks to decide. If you think the valuation is too high, you can ask for an independent one, but you must do this in writing within 3 months.
4. Arrange your mortgage and complete - Your broker will handle the mortgage application, and a solicitor will take care of the legal side. Once the sale completes, the home is yours. You can pull out at any point before then and keep renting.
Costs to budget for
Even with a discount, there are some costs to plan for:
Solicitor or conveyancing fees for the legal work.
A survey, to spot any problems before you commit.
Mortgage fees, such as product, valuation or broker fees.
Stamp Duty, usually based on the discounted price. Many Right to Buy purchases fall below the threshold, but check with your solicitor.
Service charges if you're buying a flat.
Buildings insurance from the day you complete.
Things to think about before you buy
Repairs become your responsibility, so it's sensible to build up an emergency fund.
Flats can come with big bills for service charges and major works to the building.
Selling within 5 years means repaying some or all of your discount, on a sliding scale.
Selling within 10 years means you must offer the home to your old landlord first.
Rural homes may have limits on who you can sell to later.
Be wary of companies offering to fund your purchase in return for owning your home later. Always get independent advice first.
Speak to an Expert
If you are thinking of buying your council home, it is important to get mortgage advice from an experienced professional. They will be able to assess your situation and give you the best advice on how to proceed.
At Echo Finance, we are experts in Right to Buy mortgages and can offer you tailored advice to suit your individual needs. We can also help you to find the best mortgage deal if you decide to go ahead with the purchase.
Here's why Right to Buy applicants come to us:
We help people buying through all kinds of home ownership schemes, including Right to Buy, every day.
We have access to 90+ lenders, including those that accept your discount as a deposit.
We're 5-star rated on leading review websites.
Your first chat with one of our mortgage advisers is free, with no obligation. Ready to talk it through? Get started here.
FAQs
Possibly. It depends on how serious your credit issues are and how long ago they happened. Some lenders are more flexible than others, so speak to us if you're worried about your credit history. If you're currently bankrupt or facing a possession order, you may not be able to use the scheme itself.
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