Right to buy mortgages for council tenants

The 1981 Housing Act allows council tenants to buy the property they live in from the local authority. Most Council Tenants have "the Right To Buy" their home. The right to buy means you can buy your home from a local authority, a non-charitable housing association or a housing action trust. Usually a "right to buy" mortgage will cost less than on the open market because as a tenant you can obtain a discount on the loan.

We make every attempt to ensure the accuracy and reliability of the information stored on and accessible from this web site, but this information should not be relied upon as a substitute for formal advice from Departments of the Council and its partners.

To qualify for a right to buy mortgage you must:

Be the legal tenant of the property you wish to purchase.

Have been a tenant of this Council or another "right to buy" landlord for at least two years. You may be entitled to a discount off the purchase price of your home. The amount of discount depends on how long you have been tenant in the Council House or other "right to buy" landlord, and the type of dwelling you are living in.

Before you buy your council home

Buying your own home is probably the biggest financial decision you will ever make. If you decide to exercise your right to buy you will become responsible for all the costs of maintaining your home, including major structural repairs, routine repairs and improvements.

As a tenant you may be claiming housing benefit to help with the rent. As an owner-occupier you will not receive any housing benefit to help with your mortgage costs. You may be entitled to income support to help with housing costs, but this is not usually paid until nine months after you first claim.

Reselling your home after buying under Right to Buy

You may sell your home whenever you like. However, if you sell within five years of buying it, you will have to repay some or all of the discount that you received.

During the first year, you must repay all the discount
During the second year, you must repay 80% of the discount
During the third year, you must repay 60% of the discount
During the fourth year, you must repay 40% of the discount
During the fifth year, you must repay 20% of the discount
After five years you can sell without repaying any discount

If you decide to sell your property within 10 years then you will have to offer the property to your landlord first at market value - if your landlord doesn’t want it then you are free to sell the property on the open market.

How to apply for your 'Right to Buy'

This is a brief description on how to apply. For further details please refer to pages 27-35 of the government help booklet 'Your right to buy your home', available from The Housing Corporation.

First make sure you have read the booklet 'Your right to buy your home'.

If you consider that you have the right to buy then the next step is to fill in form RTB1 which once again can be obtained through your landlord. This form needs to be returned to your landlord.

Your landlord will then send you a response notice RTB2 which will tell you if you have the right to buy or not.

If you have the right to buy then your landlord will send you a Section 125 notice which tells you, amongst other things, the price you must pay less discount and the terms and conditions of the sale.

Let us arrange the mortgage and carry on the purchase as with any other property transaction. Remember that you can apply for a mortgage even if you have rent arrears, CCJ's or defaults. To apply for your mortgage simply complete our online enquiry form and we'll respond within 24 hours with an illustration tailored to your needs.

Other home ownership schemes

If you do not have the Right to Buy then you may wish to explore these other schemes which can help you make the move into home ownership:

Right to Acquire - This scheme was introduced in the Housing Act 1996, and gives certain tenants of Registered Social Landlords (e.g. housing associations) a statutory right to buy their home at a discount, generally between £9,000 - £16,000 depending on the local authority area. It only applies to RSL properties built or purchased with public funds or transferred from a local authority after 1 April 1997, subject to certain exceptions. Eligible tenants must have spent a total of two years as a public sector tenant. The discount is funded by a grant from the Housing Corporation. For further information on the scheme contact your RSL.

Voluntary Purchase Grant Scheme - The Voluntary Purchase Grant Scheme (VPG) was introduced in April 1996. Tenants of Registered Social Landlords (RSL) in properties built before 1 April 1997 who do not qualify for the Right to Acquire may be able to buy the home they rent at a discount. The scheme does not apply to all tenants, as it is up to the RSL whether it takes part in the scheme and some properties may be excluded.

Cash Incentive Scheme - The objectives of the Cash Incentive Scheme are to release local authority accommodation for letting to those in housing need and to encourage owner occupation. The scheme works by the payment of a grant to a tenant to assist them buying a property in the private sector. It is up to each local authority to decide whether to run a CIS scheme and tenants have no mandatory right to a grant. The size of grant payable is set by local authorities themselves, but must be within parameters set by the Department - up to 80% of the average Right To Buy discount for London, South East and Eastern regions and £10,000 elsewhere. All grants must be means tested.

Starter Home Initiative - This SHI was one of a number of proposals included in the Housing Green Paper in recognition of the difficulties faced by key workers on low income when purchasing a house in high demand, high price areas. The Starter Home Initiative is expected to help around 10,000 key workers, particularly nurses, teachers and the police to buy homes in urban and rural areas where high prices would otherwise prevent them from living in or near to the communities they serve.

In addition, there are a number of shared ownership schemes such as the Homebuy scheme.

How can I get a free mortgage quote?

To get your free mortgage quotes, you just need to enter some basic information into our simple online quote form and your dedicated adviser will search the entire marketplace to find you the best mortgage deals available.

Or, if you prefer, you can call a fully trained adviser on 0800 169 4984. It will only take a few minutes of your time today but could save you thousands of pounds in interest payments, and will eliminate any worries you may have about getting the best deal possible.