Understanding Right to Buy
Right to Buy allows eligible council and housing association tenants in England to purchase their home at a discount. This discount can be substantial - up to £87,200 in most of England or £116,200 in London (2024 figures). The discount can act as your mortgage deposit, meaning you may not need any savings to buy your home. For those who've previously bought under Right to Buy and are looking to remortgage, competitive deals are available from many lenders.
The discount amount depends on how long you've been a tenant - starting at 35% of the property value for houses (50% for flats) and increasing by 1% for each extra year (2% for flats), up to a maximum of 70% or the cash cap, whichever is lower.
How Right to Buy Discounts Work as a Deposit
Your Right to Buy discount can be used as a deposit instead of cash savings. For example, if your home is valued at £200,000 and you're entitled to a 40% discount (£80,000), you'd only pay £120,000. That £80,000 discount gives you 40% equity immediately, meaning you'd need a mortgage of just £120,000 at 60% LTV - which unlocks competitive interest rates.
Some lenders will let you borrow the full purchase price after discount, meaning you need no cash deposit at all. Others may want you to contribute some savings. Each lender has different criteria for Right to Buy mortgages.
Which Lenders Accept Right to Buy?
Many mainstream lenders offer Right to Buy mortgages, including Halifax, Nationwide, NatWest, and others. Some have specific Right to Buy products, while others simply accept RTB as a valid route to the deposit required for standard products. Building societies often have flexible criteria for RTB applications.
Important considerations include whether the lender will lend on your specific property type (some ex-council properties may be non-standard construction) and whether they require a cash contribution from you. A broker familiar with RTB can quickly identify suitable lenders for your situation.
Discount Repayment Rules
Be aware that Right to Buy discounts come with strings attached. If you sell your home within 5 years of buying, you'll have to repay some or all of the discount - 100% if sold in year 1, reducing by 20% each year. After 5 years, the discount is fully yours. Additionally, if you sell within 10 years, you must first offer it to your old landlord or another social landlord at market value.
These rules are designed to prevent profiteering from the scheme. They're worth understanding before committing, though they don't affect your ability to remortgage to a better deal - only selling the property triggers repayment.