What is Right to Buy?
Right to Buy allows eligible council tenants in England to purchase their home at a discount. The discount can be substantial - up to £87,200 in most of England or £116,200 in London (2024 figures). Housing association tenants may have similar rights under Right to Acquire or Preserved Right to Buy.
The scheme has helped millions of tenants become homeowners since its introduction in 1980. Your discount can effectively act as your mortgage deposit, potentially requiring no cash savings.
How Much Discount?
Your discount depends on how long you've been a council tenant. For houses, you start at 35% of property value after 3 years as a tenant, increasing by 1% for each additional year up to 70% maximum. For flats, you start at 50% after 3 years, increasing by 2% per year up to 70%.
The discount is capped at the cash maximum (£87,200/£116,200) or the percentage maximum (70%), whichever is lower. Some properties have reduced discounts if they were purchased by the council less than 15 years ago.
Eligibility
You must be a secure council tenant (or similar for housing associations) with at least 3 years' tenancy. The property must be your main home. Some properties are excluded - sheltered housing, properties scheduled for demolition, or those with certain tenancy types.
Joint applications with up to 3 family members who live with you are possible. Their residence period can help qualify, though only the tenant gets the main discount calculation.
Using Your Discount as a Deposit
Your Right to Buy discount can act as your deposit. If your home is valued at £150,000 and you have a 40% discount (£60,000), you'd pay £90,000. The £60,000 discount gives you 40% equity immediately, meaning you need a 60% LTV mortgage - which typically comes with competitive rates.
Some lenders require you to contribute some cash; others accept the full discount as your deposit. Lender criteria vary, so broker advice is valuable.
Discount Repayment Rules
If you sell within 5 years of buying, you must repay some or all of your discount: 100% in year 1, reducing by 20% each year. After 5 years, the discount is yours to keep. You must also offer the property to social landlords first if selling within 10 years.
These rules apply to selling, not remortgaging. You can remortgage without triggering discount repayment.