What is Right to Buy?
Originally introduced in 1980, the Right to Buy scheme gives council tenants and some housing association tenants the opportunity to buy their home at a discount.
Under the current system, the maximum discount you can get is 70% off the purchase price of your home, up to a total of £108,000 in London and £80,900 elsewhere in England.
Which? Mortgage Advisers can find and arrange the best mortgage for you.
Video: how Right to Buy works
Right to Buy eligibility
Try our quick Right to Buy quiz to discover whether you could qualify, and read on to find out more about the eligibility rules.
Under the current rules, if you have spent at least three years living in a council house or flat, you can use Right to Buy. If you've moved around a lot, don't worry, as the three-year period doesn't have to be continuous – although you do need to have lived in your current home for at least 12 months.
Joint applications are allowed, so you have the option of buying your home with a fellow tenant or partner. You can also apply with up to three family members, provided they have also lived in the property for the past 12 months.
If you've had debt problems, this may mean that you can't use Right to Buy - find out more in the Right to Buy mortgages section below.
Currently, the Right to Buy scheme only applies to tenants in England.
While the vast majority of English council houses can be purchased through Right to Buy, there are some restrictions, so check your property is eligible before applying.
Right to Buy discount levels
Your Right to Buy discount depends on the type of property you're buying and how long you've been a council tenant.
If you live in a house and have been a council tenant for at least three years, you can benefit from a 35% Right to Buy discount. After five years, this discount increases by 1% each year, up to a maximum of 70% if you've been a council tenant for 40 years or longer.
Buyers who live in a flat get an initial discount of 50% after three years, which increases by 2% each year after five years. As with houses, the maximum discount you can get on your council flat is 70% off the purchase price.
If you buy your home through Right to Buy and then sell it within five years of your purchase, you will have to pay back some or all of the discount.
- Find out more: the costs of buying a house or flat
If you want to use Right to Buy but only have a small (or no) deposit, you may still be able to get a mortgage. This is because many - though not all - lenders will accept the discount you get with Right to Buy as a deposit.
If you're buying a house with a discount of 50%, for example, a lender may offer you a mortgage on the other 50% of the property without requiring a deposit, on the condition that they can repossess the entire property should you fail to make your repayments.
However, these kinds of deals will vary between lenders and may not always be available - talk to an independent mortgage broker such as Which? Mortgage Advisers (0800 197 8461) for advice on this.
Normally you won't need to take out a specific Right to Buy mortgage, and this means that you'll be subject to the same affordability checks as other mortgage applicants. This means that your income and spending habits will be assessed and you'll have to pass your lender's credit check too.
This credit check will flag any problems with debt, which could disqualify you from buying your house under Right to Buy. You cannot use the Right to Buy if you have:
- an un-discharged bankruptcy
- a pending bankruptcy petition
- an Individual Voluntary Arrangement with people you owe money to
- a debt relief order.
If you're self-employed, you may be asked to provide several years' worth of accounts to prove your income (see our guide to self-employed mortgages for more on this).
Getting a Right to Buy mortgage while on benefits
Some lenders will take certain types of benefits into account when calculating affordability for Right to Buy mortgage applicants.
When you've found one that does this, try totalling up your monthly incoming and outgoing payments, including any benefits or wages - then you can work out roughly what you might be able to afford to pay each month.
Housing benefit cannot be used to pay a mortgage, so lenders will never consider it. You will stop receiving housing benefit once you become a homeowner.
- For expert, impartial help getting a mortgage with Right to Buy, call Which? Mortgage Advisers on 0800 197 8461 or fill out the form at the bottom of this page for a free call back.
How do I buy my home using Right to Buy?
1. Fill out the Right to Buy application form
The first step to buying your home through the Right to Buy scheme is completing the government's online application form.
When filling out this form, you will need the following details to hand:
- Your property's full address
- Your landlord's name
- Full names of everyone on your tenancy agreement
- Full names of any family members you are buying the property with
- Your current and previous tenancy details (as well as those of anyone you are purchasing with)
- Information on any improvements you have made to the property while living there
- All tenants' signatures.
2. Wait for your landlord's response
Once you've submitted the form, your landlord has up to four weeks to confirm whether you have the Right to Buy (or eight weeks if you've been with your current landlord for under three years).
If your application is successful, your landlord should then send you an offer within eight weeks (or 12 weeks if it's a leasehold property). This offer should include the purchase price, the discount, and details of any structural problems.
3. Accept the offer
You will then have 12 weeks to accept the offer. During this time, it is advisable to do the following:
- Secure a mortgage: even if you can afford your home without a mortgage, you should still see if lenders would theoretically offer one on the property itself - if they won't, you may struggle to sell it in the future.
- Get a property solicitor: a property solicitor or conveyancer will help with the legal side of the purchase.
- Have a property survey completed: this will identify any issues with the condition of the house.
Once you're happy with the terms and have arranged the finances, you can complete your purchase.
The risks of buying a council house
Owning a home is something that many people aspire to, but it shouldn't be entered into lightly. You'll need to prepare for various new financial responsibilities, including:
- Mortgage repayments: if you fail to keep up your mortgage repayments, your home could be repossessed. Use our mortgage repayment calculator to work out how much you'll have to pay back each month.
- Maintenance and repair costs: the council will no longer cover any repairs your home needs.
- Upkeep of communal areas: you may also be responsible for keeping any communal areas in good condition.
- Buildings insurance: you'll need to get buildings insurance to cover yourself in case of damage from a range of causes, from floods to fires. This will usually be a requirement of your mortgage lender.
There are a number of risks specific to buying a council house, too:
Council houses, especially those in desirable areas, can be at risk of demolition. In 2018, the BBC found that 118 council estates in London were due for redevelopment, with 80 slated for partial or full demolition.
If your home is already due to be demolished, your landlord may reject your Right to Buy application. If the council wants to demolish your home after you've bought it, they will likely buy it from you with a compulsory purchase order (CPO) and force you to move out.
Decrease in property value
The value of your property is not guaranteed to increase. If you were planning to sell your home in the future, a decrease in value could leave you out of pocket.
Also bear in mind that if you want to sell within the first five years of buying your home, you'll have to pay back some or all of the discount.
Loss of housing benefit
As mentioned above, any housing benefit payments will stop once you become a homeowner, so your mortgage will need to be paid by other means.
Right to Buy housing association properties
At the moment, Right to Buy only automatically applies to council tenants, but there are a few circumstances in which you can qualify as a housing association tenant too.
Right to Acquire
As it stands, most housing association tenants can only buy their homes at a discount if they have a 'Preserved Right to Buy' or a 'Right to Acquire'.
You could have the Preserved Right to Buy if you were previously living in a council property that was then transferred to another landlord, such as a housing association.
The Right to Acquire gives housing association tenants a discount of between £9,000 and £16,000 when buying their homes, depending on their circumstances and where they live in the UK. You can find out whether you're eligible by reading the government advice page on Right to Acquire.
Right to Buy housing association properties in the Midlands
In August 2018, the government launched a pilot of Right to Buy for housing association tenants in the Midlands. Eligible tenants had one month to apply for the pilot, with places allocated through a ballot.
Around 9,000 tenants from 45 different housing associations applied for the scheme and 6,000 were successful. However, the government confirmed to Which? in November 2018 that the pilot only had funding to cover around 3,000 sales.
The pilot is set to run until Spring 2020, after which the government will assess its success. This means housing association tenants elsewhere in the country are unlikely to be able to buy their properties using Right to Buy any time soon.
The following housing associations took part in the pilot:
Alternatives to Right to Buy
If you can't afford to buy your home using Right to Buy, you could instead take advantage of other schemes such as Social HomeBuy.
Social HomeBuy allows you to purchase a share of your council or housing association property and pay rent on the rest of it.
This differs from Right to Buy because, if you use Social HomeBuy, you could receive a discount of £9,000-£16,000. You can find out more with the government guide to Social HomeBuy.
Get personal Right to Buy mortgage advice
If you need help getting a Right to Buy mortgage, speak to Which? Mortgage Advisers for friendly advice and expert recommendations on the best deals. Call today on 0800 197 8461 or fill in the callback form below.