Right to Buy Mortgages

The Right to Buy scheme is a long-standing government initiative that gives council and housing association tenants the chance to buy their home, often with a generous discount. Originally launched in the 1980s, it's helped millions of people become homeowners without needing a huge deposit upfront.

The scheme is designed to help people who’ve been renting for a long time take their first steps onto the property ladder. If you’ve lived in a council home or housing association property in England for at least three years, this could be your opportunity to stop renting and start owning.

How Does the Right to Buy Scheme Work?

If you’ve been living in your council or housing association home for at least three years, and you’re a secure tenant, you might be able to buy it through Right to Buy.

The idea’s pretty simple: you get a discount off the market value of the home based on how long you’ve been a tenant. The longer you’ve been there, the bigger the discount, up to a maximum limit. Once you’ve had your application approved, you can apply for a mortgage just like you would with any other home purchase.

How Much Discount Can You Get with Right to Buy?

The rules regarding the Right to Buy discount were changed by the Labour Government in November 2024. Since then, the Right to Buy discount is based on the number of years you’ve been a tenant, the type of property you live in, and the regional cap (see the table below). The maximum discount you can get is either 70% of the value of your council home or the regional discount cap, whichever is lower.  

• Council House. If you’ve been a tenant in a house for between 3 and 5 years, you’ll get a 35% discount up to the regional cap (whichever is lower) and 1% for every year after that up to 70% (or the regional cap). 

• Council Flat. If you’ve been a tenant in a flat for between 3 and 5 years, you’ll get a 50% discount up to the regional cap (whichever is lower) and 2% for every year after that up to 70% (or the regional cap). 

The table below outlines the regional discounts. 

Source: www.gov.uk

Who Qualifies for the Scheme?

To be eligible for the Right to Buy scheme, you need to meet a few key criteria:

• You must be a secure tenant of a council or housing association property.

• You must have lived in public sector housing for at least 3 years (they don’t have to be consecutive).

• The property must be your main home.

• You have no serious legal issues relating to debt or antisocial behaviour.

If you live with someone else, like a spouse, partner, or family member, they may be able to apply with you, even if they’re not on the tenancy.

How Much Can You Borrow?

Lenders treat Right to Buy mortgages the same way they do any other mortgage. How much you can borrow depends on your income, outgoings, and credit record. As a rough starting point, you might be able to borrow around 4.5 times your annual income; in some cases, it can be higher than this. 

If you’re applying with someone else, you can use your joint income to boost your borrowing power even further. Mortgage lenders will also conduct a series of affordability checks before deciding how much you can borrow and ensure you can comfortably maintain your mortgage repayments throughout the term of the loan. 

To see how this might work out for you, based on your annual income, take a look at our quick and easy-to-use mortgage affordability calculator. 

You can also use our mortgage repayment calculator below to see what the amount you're looking to borrow could cost you each month and check if this fits with your budget.

Do You Need a Deposit for a Right to Buy Mortgage?

In some cases, no. One of the biggest benefits of the Right to Buy scheme is that the discount you receive can often be used as your deposit. So, let’s say you live in Yorkshire and you qualify for the full regional discount (£24,000). This could count as a sufficient mortgage deposit in the eyes of many lenders, depending on the value of your council home. 

However, some lenders may still require a small deposit in addition to the discount, especially for more complex mortgage applications. The good news is, the amount required is usually much lower than for buyers purchasing on the open market.

How Does Right to Buy Differ From Right to Acquire?

They sound similar but aren’t quite the same, and while both schemes aim to help tenants become homeowners, there are some key differences:

• Right to Buy is for secure council tenants and some housing association tenants who transferred from a local authority.

• Right to Acquire is aimed at housing association tenants whose properties were built or bought after 1997 with public funding.

• Discounts for Right to Acquire are lower, usually up to a maximum of £16,000, depending on where you live.

If you're not eligible for Right to Buy, you might still qualify for Right to Acquire, so it’s worth checking with your landlord.

How to Get a Right to Buy Mortgage

There are a few key steps you’ll need to take. Here’s how to keep the process smooth and on the right track.

1. Complete an RTB1 form. This is your official Right to Buy application. Once you’ve completed it, send it to your landlord. 

2. Wait for your landlord’s reply. Your landlord is required to respond within four weeks (or eight if you’ve been a council tenant for less than three years). 

3. Review their offer. The landlord will send you a formal offer outlining the applicable discount, details of the property, any service charges applied, and all the purchase terms. 

4. Apply for a mortgage to complete the purchase. Once you receive your offer, you have twelve weeks to respond (don’t worry, you can withdraw at any time without affecting your tenancy status). 

5. Speak to a mortgage broker. The quickest way to arrange your mortgage is to speak with a mortgage broker who has experience with the Right to Buy scheme - like us! Our mortgage team will help you find the most competitive rates and prepare your application with all the necessary documentation. 

Is a Right to Buy Mortgage a Good Idea?

There are certainly clear benefits to using the Right to Buy scheme, but as with anything, it’s important to weigh the pros and cons before making a final decision. 

Advantages

• Big discounts on the purchase price.

• In many cases, no mortgage deposit is needed.

• A straightforward route to homeownership for long-term tenants.

• Potential to build equity quickly due to the lower purchase price.

Drawbacks

• You’re responsible for all maintenance and repairs once you own the home.

• Selling within 5 years may require repaying some or all of the discount.

• Not all mortgage lenders offer Right to Buy mortgages.

• You may face restrictions if the property is in a designated rural area.

If you’re still keen on buying a home, but not your council home, there are other government mortgage schemes available that can help. For example, Shared Ownership is a part-buy, part-rent scheme designed to help first-time buyers and people with modest incomes buy properties with a low deposit. The First Homes Scheme also offers new-build homes at an attractive discount (usually at least 30%) for first-time buyers and key workers. 

What Is the 10-Year Rule for Right to Buy?

If you sell your home within 10 years of buying through Right to Buy, you have to offer it back to your former landlord (or another social landlord) before putting it on the open market. This is called the Right of First Refusal.

They have 8 weeks to decide. If they say no, you’re free to sell it wherever and to whomever you like.

If you sell within the first 5 years, you’ll also need to repay some (or all) of the discount you received. The exact amount depends on how long you’ve owned the property and how much it’s worth when you sell.

After 10 years, you’re free to sell the property without any restrictions.