Right to Buy Mortgages
If you want to purchase your council or housing association property, we can assist you in finding a suitable mortgage deal that fits your financial situation. Even if you have a poor credit score, it does not automatically disqualify you from obtaining a Right to Buy mortgage.
What is a Right to Buy Mortgage?
Mortgages for Right to Buy properties operate similarly to regular residential mortgages. Anyone who buys their council house through the Right to Buy scheme has access to the same mortgage products as other home buyers. The amount you can borrow will be based on the property's market value, the size of your deposit, and various affordability criteria, such as your income and credit history.
Is a deposit required for a Right to Buy Mortgage?
Most lenders will accept your Right to Buy discount as a deposit, but some may still require a cash deposit. Keep in mind that a larger deposit may lead to lower monthly mortgage payments and access to more attractive mortgage deals.
What if I have a bad credit score?
Even if you have a poor credit score, you may still be eligible for a Right to Buy mortgage. At Transparent Mortgage Services, we have access to several mortgage products for people with imperfect credit histories, so don't hesitate to contact us today.
What is the Right to Buy Scheme?
The Right to Buy is a scheme that allows existing tenants of public-sector homes in England to purchase the property they presently rent at a discounted price below market value. Similar schemes are available in Wales and Northern Ireland, but the regulations vary somewhat. Right to Buy has been in existence in some form for several decades, with over a million council houses sold to tenants in the 1980s.
Although changes in government policies reduced discounts and altered who could take advantage of Right to Buy, further changes to the scheme in 2015 made it more attractive and widely available to public-sector tenants in England.
The qualifying tenancy period has been reduced by the government - you now only need to have been a public-sector tenant for three years, rather than the previous five. The maximum Right to Buy discount available has been raised - it is currently £80,900 (or £108,000 in London), increasing in subsequent years in line with the Consumer Price Index (CPI).
How much is the Right to Buy discount?
The actual percentage discount off the market value of your home with Right to Buy varies depending on the type of property and the length of time you have been a public-sector tenant:
For houses, public-sector tenants become eligible for a 35% discount after three years of tenancy. After five years of tenancy, the discount increases by 1% for each additional year as a public-sector tenant, up to a maximum discount of 70% (currently capped at a total of £96,000 or £127,900 in London).
For flats, public-sector tenants become eligible for a 50% discount after three years of tenancy. After five years of tenancy, the discount increases by 2% for each additional year as a public-sector tenant, up to a maximum discount of 70% (currently capped at a total of £96,000, or £127,900,000 in London). (CPI). The maximum discount is correct as of April 2023.
What is the eligibility criteria?
- You must be a secure tenant residing in a self-contained property.
- The property must be your only or main residence.
- You must have been a public-sector tenant (with a council, housing association, or another public-sector landlord such as an English NHS trust) for a minimum of three years.
- You don't have to have been a public-sector tenant for three consecutive years – if you have had a break in your tenancy, you can still apply, as long as you have been a public-sector
How To apply for Right to Buy
You must complete an application form and submit it to your landlord. The landlord will respond with an offer that includes several details such as the price of the property, how the price was determined, the discount you are eligible for, and a description of the property and any accompanying land. In addition, the offer will include estimates of service charges for the first five years (if applicable) and a disclosure of any existing structural issues with the property.
After receiving the offer, you have 12 weeks to confirm your intention to buy. If you feel that the landlord has overvalued your home, you have the right to request an independent valuation within three months of receiving the offer.
In the event that your application for Right to Buy is rejected by the council or housing association, they must provide you with a reason for the refusal.
