If you’ve lived in your council house or flat for more than three years, then the Right to Buy scheme could help you make the move to homeownership at a heavily discounted rate.
Since the scheme’s introduction in 1980, it has been divisive. While it’s helped over 2m households to buy their homes, giving them the opportunity to create more financial security, it’s also been criticised as contributing to the current affordable housing crisis.
The biggest uptake of Right to Buy was during the 80s, when over 100,000 homes were sold each year, but this has reduced over the last ten years and in 2022 there were 14,006 sales of social housing through the Right to Buy scheme.
While in recent years the number of people who are eligible for Right to Buy has decreased, in 2022, Boris Johnson announced that the Right to Buy scheme would be extended to include more people living in housing association properties. It was also proposed that for every home sold under the scheme, a new “like-for-like” property will be built to replace it, in an aim to make the scheme more sustainable for the future.
Here we will look at how Right to Buy works, who is eligible, what the rules are and where to apply.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
What is Right to Buy?
The Right to Buy scheme was introduced in 1980 across the UK, with the intention of helping more people become economically self-sufficient. Since then, the scheme has been dropped in Scotland and Wales, but it is still available for eligible individuals in England and Northern Ireland. The scheme in Northern Ireland is different from the one in England and the range of people who are eligible for it changed on 28 August 2022, so fewer people will be able to use it than before. You can read more about how the Northern Ireland scheme works on the Northern Ireland government website.
Right to Buy allows most council house or flat tenants to apply to buy their property if they have lived there as a secure tenant for three years or more. The main feature of the scheme is that it offers a considerable discount on the market value of your home. This discount could be up to £87,200 across England or up to £116,200 in London boroughs. The maximum discount increases each year in April in line with inflation.
Right to Buy is just one of the government’s ‘Own Your Home’ strategies, which also includes the Mortgage Guarantee scheme (read more about this in our guide Mortgage Guarantee Scheme – How does it work?) the Help to Buy Equity Loan and the Shared Ownership scheme. There are some obvious benefits to homeownership, with the main advantage being the financial security it can offer, particularly in later life.
A note on properties owned by housing associations
A really important thing to note is the difference between council housing and housing association housing and the different tenancy agreements that come with them. While Right to Buy can also apply to housing association properties they will need to have been sold from the council to a housing association or similar authority while you were living in it, which might mean you have a Preserved Right to Buy.
Additionally, you’ll need to have a secure tenancy agreement, as opposed to an assured tenancy agreement, something that few people are now issued with. If you have been living in an ex-council home that was sold to a housing association before you moved in, and you are an assured tenant, you won’t be able to access Right to Buy, but you might be able to access the Right to Acquire scheme. You can find out more about how this scheme works here.
Under these rules, the number of people living in housing association properties who were able to take advantage of the Right to Buy scheme was small. However, following the government’s announcement that it would be extending the Right to Buy scheme to include people living in housing association properties, it’s suggested that a further 2.5m people might be able to buy their properties through the scheme if they meet the eligibility criteria.
Right to Buy discount rates
The level of discount you’ll be eligible for depends on the type of property you’re living in, how long you’ve lived there, and its value. These rates increase each year in line with the Consumer Price Index measure of inflation, which reflects how much living costs rise by.
It’s important not to confuse Right to Buy with Right to Acquire, which is the scheme that those living in housing association homes might be able to access if they want to buy their property. While both offer you the opportunity to buy your home at a discounted rate, the maximum discount available via Right to Acquire is between £9,000 and £16,000 on the price of your property.
If you qualify for the Right to Buy scheme, then generally, the following discounts will apply:
| Property type | Discount if you’ve been a public sector tenant for three to five years | Discount if you’ve been a public sector tenant for five years or more |
| Houses | 35% | After five years, the discount goes up 1% for every extra year you’ve been a public sector tenant, up to a maximum of 70% or £87,200 across England and £116,200 in London boroughs (whichever is lower). |
| Flats | 50% | After five years, the discount goes up by 2% for each extra year you’ve been a public sector tenant, up to a maximum of 70% or £87,200 across England and £116,200 in London boroughs (whichever is lower). |
If your landlord has spent money on your home in the last 10 to 15 years and this has increased the property’s value, then you may be entitled to less or no discount depending on when the work was done and how much the work cost.
What are the eligibility rules for Right to Buy?
If you want to access Right to Buy, you will need to meet a number of eligibility criteria. The following need to apply to you and your council home:
- It’s your only or main home – so you need to be living in the property.
- It’s self-contained – this means that you can’t purchase any shared accommodation, so if you share a bathroom or a kitchen etc with anyone else, you probably won’t be eligible for the Right to Buy scheme.
- You’re a secure tenant – so you will need to have a contract in place with your landlord. This contract will usually mean that as long as you don’t break the terms of the contract then you can stay in the property for the rest of your life, or until you want to move.
- You’ve had a public sector landlord for three years (for example, a council, housing association or NHS trust). It does not necessarily need to be three years in a row, and there are a number of types of accommodation that also count towards these years, including armed forces accommodation.
- Your home is not due to be demolished – as councils aim to enhance the living conditions of thousands of council properties across the UK, some properties will be registered for demolition. You should be well aware of these plans from your landlord, but it’s always worth checking.
- You don’t have any legal problems with debt – your local council or housing association wants to be sure that you will be able to pay for your property and any mortgage you take out once you have gone through the Right to Buy process. So if for example you are undischarged bankrupt, have a bankruptcy petition pending against you, or have obtained a debt relief order, you may not be able to access the scheme.
- You don’t have any outstanding possession orders – these are usually any court order notices that you need to leave your home, often due to breaching the terms of your rental agreement or not paying rent. If you have any of these, it’s unlikely that you will be able to access the Right to Buy scheme.
If you are living with other people, such as your partner, husband, wife or family members, you might be able to submit a joint application if you’ve lived together over the past 12 months.
If you meet each of these criteria, it’s likely that you will be able to apply for Right to Buy on your home and can start the process of becoming a homeowner.
Is there an age limit for Right to Buy?
Yes, anyone who wants to apply for Right to Buy, either by themselves or in a joint application needs to be at least 18 years old.
How does the Right to Buy process work?
There are four main steps of the actual Right to Buy application process, but in addition to these four steps, you will also need to think about financing the remaining value of your home, which will often mean applying for a loan or a mortgage.
Before you apply
Applying for Right to Buy can take some time and effort so to make sure you don’t waste your time, it’s a good idea to take the eligibility quiz before you start the application process. This will let you know whether your application is likely to be successful or not.
Once you know whether you are eligible, it’s a really good idea to think about how you will finance paying for your home. While Right to Buy will offer you a considerable discount, you will still need to pay for the rest of the property, so it’s worth taking some time to consider how you will do this and all the other costs involved. Have a look at our article Mortgage fees and costs explained for an idea of what costs you might need to consider when buying your home.
Applying for Right to Buy
Once you’ve figured out if you are eligible and how you are going to finance your property, you can start the application process:
- Complete the Right to Buy application form – the application is made up of six sections and covers a range of data, so it’s worth gathering the evidence and documents that prove the below in advance. The sections include:
- Details of the property you want to buy and your landlord
- Details of the tenants who want to buy the property and share the Right to Buy with you.
- Details and evidence of your current and previous tenancies that mean you are eligible for Right to Buy
- Details of any previous discounts (such as Right to Buy or Right to Acquire) where you went through with the purchase of a property
- Details of any improvements you’ve made whilst living in the property – if these improvements have increased the value of your property, these won’t be included in the valuation of the property
- Signatures of all tenants – these will need to be done once you have a hard copy (printed) of the application form.
- Send it to your landlord – while the form is available online, you can’t actually submit it digitally. Once you’ve completed the application form, you will need to print it off, sign anywhere that is required and then send it to your landlord. You can do this in the post via registered or recorded delivery so you have a receipt or you can deliver it by hand, but make sure you get a signed receipt saying that your landlord has received it.
- Your landlord will say yes or no within four weeks of getting your application. If the landlord you are applying to has been your landlord for less than three years, they are allowed to take up to eight weeks to respond to you. If they say no to your application, they need to let you know why.
- If your landlord has said yes, they’ll send you an offer. If the property is leasehold, they will do this within 12 weeks of saying yes. If the property is freehold, they will do it within eight weeks.
From this point forward, it’s up to you to get things sorted. You will have 12 weeks to accept your landlord’s offer and will need to begin arranging a survey, appointing a solicitor and arranging a mortgage or loan. Have a look at our article How to apply for a mortgage – everything you need to know for a guide on this process.
If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Do I need a deposit to buy my council house?
If you opt for a mortgage, you might need a deposit for it, but some lenders will accept the Right to Buy discount as your deposit, so it’s worth checking whether your lender will allow this. Some lenders, however, will require a deposit of either 5% or 10% even if you’re entitled to a significant discount, so always check with any lender you’re considering using before you proceed, or seek advice from a mortgage broker on the best options for you.
Can my child buy my council house for me?
If a family member, such as your child, lives with you and they have done so for the past 12 months then they might be eligible to enter into a joint Right to Buy application with you and could pay for the purchase of your property.
If they don’t live with you, they could still help you buy your property as there are no rules that say you have to pay for it yourself, but it’s important to note that they will have no legal ownership of the property, it will only be in your name.
Can I buy my council house without a mortgage?
If you are lucky enough to be able to pay for your property outright, you will be able to buy your council house without a mortgage. However, very few people are in this fortunate position, so a mortgage or a loan tends to be the most popular way of financing buying a home.
It’s worth bearing in mind that being a cash buyer doesn’t mean that you won’t have to pay any additional fees or charges. While you will avoid mortgage fees and interest payments in the long term, you will still need to pay for a solicitor and any other legal fees.
Can I sell my Right to Buy property if I want to?
When you buy your council home through the Right to Buy scheme, while you receive a discount on its value, you become the legal owner of the property. That being said, if you decide to sell within the first five years of owning the property, the landlord has the right to ask you to return all or part of the discount you received. However, after five years you will be able to sell the property without having to repay the discount.
If you do sell within five years, the amount you need to pay back will depend on the length of time between your purchasing through Right to Buy and selling the property:
| If you sell within: | Proportion of discount to be repaid: |
| The first year of purchase | 100% of the discount will have to be repaid. |
| Second year | 80% must be repaid |
| Third year | 60% must be repaid |
| Fourth year | 40% must be repaid |
| Fifth year | 20% must be repaid |
Source: Ownyourhome.gov
Where can I go for more information or help with Right to Buy?
Right to Buy Agent service – run by the government, this service offers free and impartial advice on Right to Buy and can help you through each step of buying your home. Phone them on 0300 123 0913 or chat online at https://righttobuy.gov.uk/agent-service/.
The Leasehold Advisory Service (LEASE) – if your council home is leasehold (if your property is a flat, it’s likely that it will be leasehold), LEASE can provide you with free, unbiased advice on your property and give you guidance on any service charges and ground rent you might need to factor into your budget. Phone them on 0207 832 2500 or go online at www.lease-advice.org.
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