Right to Buy Mortgages
If you are looking to buy your home through the Right to Buy Scheme we have lenders available who can help and you can use the discount offered by the council as your deposit.
If you have a low credit score or have bad credit registered we can have specialist lenders available that are able to provide bad credit right to buy mortgages.
Right to Buy Mortgages
Owning a home is a dream for most tenants. If you are a council tenant, the Right to Buy mortgage scheme gives you the possibility to buy the property you live in at a heavy discount. In this article, we’re going to explain the existing rules and how to adhere to the scheme.
What is the Right to Buy Scheme?
Right to Buy is a government scheme introduced through the Housing Act 1980 by Margaret Thatcher that allows council tenants to buy the properties at a discount. This discount is often accepted as a deposit by lenders, giving you easier access to a mortgage if you don’t have enough savings to pay for any upfront costs.
This scheme is fully available in England, but it has been abolished completely in Scotland. Wales is also abolishing it, while if you’re in Northern Ireland, you can only get a maximum discount of £24,000, depending on how long you lived in the property.
If you live in England, you must comply with the following rules to adhere to the Right to Buy:
- This must be your main home.
- The home must be self-contained.
- There must be a legal tenancy contract between you and the council
- You’ve had a public sector landlord for at least three years
Joint applications are accepted if you apply with someone who shares your tenancy or with a family member that has lived with you for at least 12 months if they don’t share the tenancy.
How Much is the Discount?
How much discount you can get depends on whether you’re renting a house or a flat, as well as for how long you lived there.
- If you have lived in a house for three to five years, you can get up to 35% discount. This amount goes up with 1% for each additional year you lived there, up to a maximum of 70% or £82,800 across England (£110,500 in London), whichever is lower.
- If you have lived in a flat for three to five years, you can get up to 50% of discount, which goes up by 2% for each additional year up to the maximum threshold indicated above.
How to get the Right to Buy?
To adhere to the Right to Buy scheme, you must fill in the RTB1 notice and send it to your landlord. They must respond in 4 weeks and give you a reason why they don’t want to sell if the answer is negative.
If they agree to sell, the landlord must send you an offer within 8 weeks for freehold and 12 weeks for a leasehold property.
The offer must contain the selling price and discount, as well as a description of the property, any known problems with the property, and estimates of any charges.
You must respond within 12 weeks and either accept the offer or ask for an independent valuation if you don’t agree with the terms.
How to get a Right to Buy Mortgage
Once the council has confirmed the terms of your ‘Right to Buy’ you can apply for a mortgage to any bank or building society; most lenders will accept the discount as a deposit, but you will have to comply with the lender’s conditions regarding income and credit checks to get the money.
Bad Credit Right to Buy Mortgage
If you are unable to get a mortgage from the high street lenders due to bad credit such as missed payments, defaults or County Court Judgements (CCJ’s) we have lenders who are willing to lend to clients. The main considerations for bad credit right to buy mortgages is affordability and the bad credit must be over 12 months ago.
For mortgage advise on right to buy mortgages please complete the above form and an adviser will give you a call to discuss further.
Here is some additional information on related topics from our blog:
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Right to Buy Mortgage FAQ's