To be eligible for the Right to Buy scheme, you must have lived in the property for at least three years and use it as your main home.
You can apply if you rent from the council, a housing association, NHS trust or a public sector landlord. Properties let by private landlords are not included. While the majority of housing association tenants will not qualify for Right to Buy, they may well qualify for the Right to Acquire scheme instead. This also offers the chance to buy your home at a discount, albeit a smaller one.
The maximum Right to Buy discount in England is 70% off the current market value of your home, up to a maximum of £112,300 in the London boroughs and £84,200 for the rest of England. At the start of each tax year on 6 April, the discount in England increases in line with the consumer price index (CPI).
In Northern Ireland, the maximum discount is much lower at £24,000.
Either way, the discount may be smaller if you have used Right to Buy before, or your landlord has spent money building or maintaining your home. You can get an estimate of the discount you could claim by using the government’s Right to Buy calculator.
The Right to Buy council house discount is based on:
How long you’ve been a tenant with a public sector landlord – the longer you’ve lived in a property, the bigger the discount
Whether you are trying to buy a flat or house – you can get a bigger discount more quickly on flats
The value of your property
For joint applications, the discount is calculated on the applicant with the longest tenancy. The tenancies of all the applicants cannot be added together when calculating how long you’ve been in your home.
If you’ve lived in a council house for three to five years, you could get 35% off the market value price of your property.
After five years, the discount goes up by 1% each year up to a maximum of 70%. So to get the full discount on a house, you will need to have lived there for 40 years.
You could get up to 50% off the current market value of your social housing flat once you’ve lived there for 3 to 5 years.
After 5 years, the discount goes up by 2% for each year you’ve lived there, up to a maximum of 70%. To get the maximum discount on a flat, you therefore need to have lived in it for 15 years.
To be eligible for Right to Buy, you must:
Be a council tenant, or have been a council tenant when your home was transferred to another public sector landlord (according to the Preserved Right to Buy rules)
Have a lifetime tenancy
Use the property as your main home
Have been a social tenant for at least three years
For joint applications:
You can buy your home with a spouse, civil partner, fellow tenant or up to three members of your family
You must have all lived in the property you want to buy for at least 12 months, and one of you for at least three years
All applicants will be named on the property deeds
You may be excluded from Right to Buy if:
You have problems with debt, including bankruptcy, an Individual Voluntary Arrangement (IVA), or a debt relief order
A court has taken out a possession order against you because you have not paid your rent or failed to keep to your tenancy agreement
You live in sheltered housing or accommodation specifically for the elderly or disabled
There is a lack of social housing
You are still in your introductory tenancy period
You no longer have a lifetime tenancy because of antisocial behaviour
You are in temporary accommodation following a homeless application
Not all lenders offer Right to Buy mortgages, but many do - including popular mortgage providers such as Halifax, Barclays and Santander.
David Hollingworth, associate director at mortgage broker London & Country Mortgages, says: “In terms of arranging a mortgage, this should not be difficult. Most lenders will be comfortable lending on Right to Buy properties and this includes the high street names as well as the smaller building societies.
“Quite a few lenders are prepared to offer the full 100% loan on the discounted price of the property,” he says. “The buyer is paying below market value so their risk is not 100% of the full value of the property.”
The Right to Buy mortgage process is as follows:
Check you are eligible via the government website.
Complete an RTB1 application form online (or download it). You’ll need to know: the property address; your landlord’s name; the full names of everyone on your tenancy agreement and those you’re buying with; details of all current and previous tenancy agreements; any discounts you’ve already received; and any improvements you have made to the property.
Send the RTB1 form to your landlord via recorded delivery, or ask for a dated receipt if you deliver it in person. Keep a hard copy for your reference.
Your landlord should respond within 4 weeks if you have been with them for over 3 years, or 8 weeks if it is less than 3. They will confirm you have the right to buy by sending you an RTB2 form.
Your landlord sends you an S125 offer. This should be within 8 weeks on freehold properties (or 12 weeks on leasehold properties) from when you received the RTB2.
The S125 details the property value, discount and how much it will cost to buy your home. The landlord must outline any structural problems and list service charges for leasehold properties. At this point, you still have the option to continue renting.
If you’re unhappy with your landlord’s valuation, ask a district valuer for an independent valuation.
When you’re satisfied, apply for a mortgage and commission a survey, just as you would if you were buying a house from a private seller. You’ll need a solicitor to draw up the conveyancing documents and do searches on your behalf.
You now have 12 weeks to accept your landlord’s offer.
When you have a mortgage offer and you have the papers ready, you can sign the contract. Don’t forget that you may need to pay stamp duty on the purchase. If that is the case, you can work out how much you’ll have to pay with our stamp duty calculator.
If your landlord holds up the sale or valuation without good reason, you could get a reduction in the sale price. This is why it is important to keep proof of postage and receipt of all documents. To make a claim, you’ll need to fill in a RTB6 form and send it to your landlord.
Holding up progress at your end, on the other hand, could lead to your landlord cancelling the purchase. They should warn you first and give you due notice. But it’s a good idea to keep the landlord informed if, for example, you are having trouble obtaining a mortgage.
You’ll usually have to repay some or all of the discount if you sell your Right to Buy home within five years of buying it (although this is not generally the case if you transfer ownership to a family member). If you sell your home within 10 years, you must also offer either your old landlord or another social landlord in the area first refusal on the purchase at the full market price, as agreed by you and your lender. You can call in a district valuer for an independent valuation of this.
If after eight weeks, your landlord or another social landlord does not take up your offer, you can sell your home to anyone on the open market.