What Is the Right to Buy Scheme?

Getting on to the property ladder for the first time in the United Kingdom has never been easy. With skyrocketing house prices and stagnating wages, there’s a growing risk of an entire generation having little to no chance of home ownership. 

This is one of several reasons why the UK government introduced the Right to Buy scheme. Aimed exclusively at council property tenants (and select housing association tenants), Right to Buy provides qualifying tenants with the opportunity to buy their home at a heavily discounted rate. For many, purchasing their home by way of a Right to Buy mortgage really is the only opportunity to own their own home.

But what exactly is the Right to Buy scheme? More importantly, how is eligibility determined and what kinds of discounts are available?

If you’re interested in the Right to Buy program in the UK, you may find the information below invaluable:

What Is Right to Buy? 

As mentioned above, Right to Buy is a scheme introduced by the UK government, which provides qualifying tenants with the opportunity to purchase their home with a significant discount on its approved market price. The maximum discount available for homes in England is currently £82,800, increasing to £110,500 for qualifying properties in London. There are also somewhat smaller discounts available for qualifying tenants in Wales and Northern Ireland, which currently stand at £8,000 and £24,000 respectively. 

How Does Right to Buy Work?

It’s a slightly complex process, though one that is more than worth considering due to the enormous discounts available. In order to qualify under the Right to Buy scheme, you will need to have been living in a council property for a minimum of three years. However, you don’t necessarily have to have been living in the same council property during this period. The housing association tenants who lived in council homes at the time their properties were transferred to new landlords may also qualify, if their total residency exceeds this three-year minimum. 

Applications under the Right to Buy program must be submitted directly to the landlord of the property, who will then return a decision within a few weeks.  After which, a formal offer letter will be sent to the tenant, if they are eligible under the scheme. This letter will include the market value of the property, the discount available and the subsequent price they will pay if they go ahead. If the tenant chooses to go ahead, confirmation is again submitted in writing, after which it’s a case of organising a mortgage in the normal way.

What Is a Right to Buy Mortgage?

Technically speaking, there isn’t actually such a thing as a specific Right to Buy mortgage. Candidates who qualify under the Right to Buy scheme are still required to finance their homes in the same way as any other homebuyer. The difference being that most major lenders will accept the significant discount on the property as the deposit, meaning no deposit is payable on the part of the buyer.

Organise an obligation-free consultation with a reputable broker to discuss the available options, and to determine whether the Right to Buy program is right for you.