A right to buy scheme enables most tenants of public sector in England (council or other housing associations) to buy their home that they are currently renting, at a discounted rate than the prevailing market price.

There are other schemes related to the right to buy available in Wales, Northern Ireland, and Scotland but the rules may be slightly different.

The right to buy scheme gained popularity in the late 20^th century but certain changes by the government which reduced the discount rate and limit the availability:- made the eligibility criteria stricter and turned the scheme unattractive. Later changes in the terms and conditions in 2013 and 2015 made it more appealing to individuals. Now the right to buy scheme is widely available to public-sector tenants including councils, housing associations, and NHS trusts.

The government also reduced the qualifying tenancy period to buy the home – it is now 3 years rather than 5 years. The money resulting from the sale of public-sector houses is reinvested to acquire more homes for public-sector rents.

Right to Buy Discount

You get a discount on the market value of the house if you are eligible to apply for the right to buy scheme. The maximum discount you can avail is £84,600 throughout England, except in London boroughs where it is £112,800. It increases each year in April with respect to the consumer price index (CPI).

The value of the discount depends on:

• The time you have been a tenant with a public sector landlord

• Type of property you want to buy–a house or a flat
• Value of the property

You have to pay some or your entire discount claimed if you sell the home within 5 years.

You may get a lower discount if you already used the scheme in the past.

For Houses

• You will be eligible to get a 35% discount if you have been a public-sector tenant between 3 to 5 years.
• If you have been a tenant for more than 5 years the discount will increase by an extra 1% for each additional year you have been a tenant, up to a maximum of 70%. However, the maximum discount is £84,600 across England (£112,800 in London boroughs).

For Flats

• You can claim 50% discount if you have been a public-sector tenant between 3 to 5 years.
• If you have been renting the house for more than 5 years the discount will be increased by 2% for each extra year you have been a tenant, up to a maximum of 70%. The higher limit is the same as above.

The discount will be lower if the landlord has spent money on maintenance or construction of your home:

• in the last 10 years – if the landlord constructed or acquired your home before 2 April 2012
• in the last 15 years – if the landlord acquired your home after 2 April 2012, or if you are buying the home via “Preserved Right to Buy”

You cannot get any discount if the landlord has spent more money than the current value of the home.

Preserved Right to Buy

If your home was previously owned by the council then they sold it to another authority just like the Housing Association, while you were living in it; you continue to have a Right to buy your home under the scheme called “Preserved Right to Buy”.

Applying for Right to Buy Scheme

You can apply for Right-to-Buy Mortgage by sending a formal application form to your landlord who will then respond by putting forward an offer; you can choose to reject or accept the offer according to the circumstances.

The process is outlined below:

• Fill in the right to buy application form (RTB1) online and send it to your landlord by a registered delivery process to keep a record.
• The landlord must respond within 4 weeks (or 8 weeks if the tenancy period is less than 3 years). If they accept the application and agree to sell the property they will have to get the property valued by a professional surveyor. If the landlord rejects the application they must give a valid reason.
• After that, your landlord has a time period of 8 weeks in case of freehold property and 12 weeks for leasehold property to send you an offer. This offer should detail the following:
  • The price they think you should pay for the property
  • How this price was brought out
  • Your right to buy a discount and how it was worked out
  • The description of the property and price of land included if any
  • Estimated service charges if any (for flats or maisonette) for the first five years
  • Any known problems with the structure of the property
• After you get the landlord’s offer you have 12 weeks’ time to tell the landlord that you want to buy. If you do not do so the landlord will send you a reminder. After receiving the reminder you have 28 days to make a decision otherwise the landlord can drop your application.
• If you think that the landlord has overvalued the property you can ask them for an independent valuation within 3 weeks. A district surveyor from HMRC will then visit the property and bring out the estimated worth of the property; you have 12 weeks to accept the valuation or pull out of the sale.

At this time you may also need a professional in place to arrange a survey and apply for the right mortgage and loan that you will need to finance the purchase of the property.

As independent mortgage brokers, we don’t only help you source the right mortgage for you but also help with the application and making a plan by perceiving the future circumstances. We also recommend seeking legal advice where necessary.

In the light of our experience, we will help you frame your application in such a way that your finances stand you in good stead and enhance the possibility of obtaining the mortgage.

Right to Buy Mortgage with a Partner

The right to buy scheme may appear as a golden opportunity to buy a home at a discounted rate. But you may choose to buy your home with your partner; simply because you wish it to be bought in this way or you cannot afford it on your sole circumstances.

What most lenders usually want to see is that “the named persons on the mortgage will be the same as mentioned on the right to buy scheme and ultimately the property title” but this does not necessarily need to be the case.

It is still possible to arrange the mortgage in joint names if you want so; when the right to buy scheme is in one name only. The terms and conditions may vary depending on the lender but can be arranged such that the partner will work exactly the same as a guarantor.

If you want to dive into the details of such a mortgage to explore the opportunities for you; please contact us. We will understand your requirements and circumstances and guide you along the way to choose the best option available.

Joint application for Right to Buy Scheme

You can also apply for Right to Buy Scheme in joint names with:

• Someone who is a joint tenant with you
• Up to 3 family members whom you have been living with for the past 12 months (if they share your tenancy or not)

Right to Buy Mortgage for a Retired Person

It is possible to get a Right to Buy mortgage for most people even if they are retired. Retired is a comprehensive term and does not entirely describe the state of a person, but it can be assumed that they may be someone of a mature age.

Age can be a factor that some lenders refuse to provide you with a mortgage facility. But most lenders are flexible enough to consider other factors besides age, based on the mortgage’s affordability to you.

Everyone’s circumstances are unique, but there are fair chances that you can get a Right-to-Buy mortgage even if you are retired.

The level of discount that you will be entitled to vary directly with the time you have been a tenant in your council home or housing association property –up to the maximum discount limit.

Right to Buy Mortgage Being a Self Employed

Most self-employed people think they will have difficulty obtaining a mortgage because the lenders see them as too high a risk. Being self-employed, you may need to change your perception if you think the same. You can avail if the chance has arisen to buy the council home that you are currently renting; under the right-to-buy scheme and can get the mortgage for this purpose.

The perceived difficulty for a self-employed person to obtain a mortgage is usually unforeseen, but most self-employed applicants will be assessed as any other.

As the number of people running their businesses has increased significantly, the attitude of lenders towards self-employed people has also changed over the years.

Affordability is the key factor to getting a mortgage. The lenders will happily provide mortgages to the self-employed applicants knowing they can afford the required amount.

Right to Buy Mortgage Specialists

When exploring financial products of any sort, it is always worth seeking professional advice before making any decision. We are experienced mortgage brokers and know how lenders can put people off by suspecting their suitability. At the same time, we also understand how the Right to buy discounts can make the mortgage much more accessible. We will try our best to find the right lender and the best deal for you according to your circumstances.

We have access to dozens of mainstream lenders and hundreds of mortgage products. We clearly understand how each lender assesses the applicants and, most importantly, what criteria they use to determine whether you can afford the mortgage.

We will help you find the best mortgage deal according to your financial circumstances. Even if you have a poor credit history, do not exclude them from obtaining the mortgage; we will pave your way through getting the right mortgage.