Right to Buy Scheme
What is right to buy?
The Right to Buy program, a government initiative, offers the opportunity to purchase your home at a discounted rate if you are currently renting from the council or a participating housing association. Specialised mortgages tailored for Right to Buy make this process more accessible, and in certain instances, there may be options where a traditional deposit is not required. However, it’s essential to note that while a deposit might not be necessary, other upfront fees could be associated with securing a Right to Buy mortgage.
Who qualifies for the Right to Buy scheme?
To meet the eligibility criteria, you must:
- Reside in a property rented from the council or a participating housing association, and this property must be your primary residence.
- Have a rental history with the council or a housing association for at least three years, which does not necessarily have to be consecutive.
- Have no outstanding debts with the relevant council or housing association.
- Hold a secure tenancy, indicating a lifetime tenancy where eviction can only occur with legal justification.
- Ensure that the property you intend to purchase is self-contained, with all its facilities, including a bathroom or kitchen, and not shared.
Additionally, the maximum discount you can avail yourself of through the Right to Buy scheme is limited.
Right to Buy Scheme | Getting a Right to Buy mortgage
Securing a right-to-buy mortgage can be done through a standard residential mortgage, but some lenders specialise in offering specific right-to-buy mortgage products. These specialised mortgages frequently require lower deposits than standard residential mortgages, and in certain instances, lenders may even cover the full discount price of the property.
While right-to-buy mortgages may offer relative affordability, it’s crucial to remember that additional costs come into play when purchasing your first home. Ensure you consider these associated costs to accurately gauge whether you can afford to buy a home through the Right to Buy scheme.
Right to Buy Scheme | Costs of Right to Buy
Right to Buy Scheme | Selling a Right to Buy Property
When selling a Right to Buy property, there are specific considerations regarding the repayment of the discount and the process involved:
- If you sell within the first year, the repayment is 100% of the discount.
- Second year: 80%
- Third year: 60%
- Fourth year: 40%
- Fifth year: 20%
Suppose you sell your property within 10 years of acquisition. In that case, you must initially offer it to your previous landlord or another social landlord in the vicinity, allowing them to purchase it at market value. This process is known as “right of first refusal.” If they decline, you can sell it on the open market, similar to any other property.
After the initial 10-year period, you can sell it on the open market without restrictions.
Right to Buy Scheme | Right to Buy joint application
Right to Buy Scheme | Repaying a Right to Buy discount