Feature: What is Right to Buy and am I eligible?

By Scott Clay, Residential Mortgage Specialist at Together

If you’re living in a council property or renting from a housing association, you may be able to buy your home through the Government’s Right to Buy scheme. The government’s latest Right to Buy Sales figures show that since the start of the Right to Buy scheme in 1980, until 31 March 2022, there have been over 2,003,239 sales to tenants through the scheme. The average receipt per dwelling was £97,796, an increase of 5% compared to 2020-21.

Scott Clay, Residential Mortgage Specialist at specialist lender Together comments; “The government’s ‘benefits to brick’ pledge will hopefully allow more first-time buyers to access the property ladder, using alternative ways to secure a mortgage. It’s important that all potential buyers are aware of all the mortgage options available to them like the Right to Buy Scheme. So often, people assume they can’t achieve homeownership and find themselves trapped by the expensive cycle of renting. However, with Right-to-Buy mortgages, typically provided by specialist lenders, prospective buyers can purchase their dream homes at a discounted rate. At Together, we understand that real lives rarely fit conveniently into tick boxes – and nor should they. We always look at every application on its merits and use our common-sense approach to assess affordability and the needs of the individual.”

So, if you want to buy your home but don’t know where to start, Scott Clay, Residential Mortgage Specialist at specialist lender Together discusses what you need to know about Right to Buy:

Who’s eligible for Right to Buy?

You’re eligible for Right to Buy if you’ve been a council or public sector tenant for three years and if the house will be your main home. You can buy with up to three members of your family if you live together, and you can even buy a council house or flat that’s been sold to another landlord under something called ‘Reserved Right to Buy’. You might not be eligible if you’re under threat of eviction, or if there’s a shortage of housing in your area.

Will I need to pay anything upfront?

It depends on your lender, but generally not. Right to Buy properties are usually discounted by up to £80,900 (or £108,000 in London), which technically acts as your deposit, meaning you can get a 100% mortgage on the rest. You may also be able to add fees to the mortgage and pay them off with your monthly repayments. If you want, many mortgage providers allow you to fix your interest rate for a number of years, so you know your costs aren’t going to suddenly jump up.

Can I buy a property if I have a poor credit history?

As with any lending, you’ll need to meet a few eligibility criteria for a mortgage on a Right to Buy property, though a less-than-excellent credit rating, or working more than one job, shouldn’t put you off applying. You’ll need to do your sums carefully to make sure you can comfortably afford your monthly repayments, as most lenders are more interested in your total outgoings than just your take-home salary. Being able to buy with up to three members of your family can also help spread the cost.

What happens if I sell my Right to Buy home?

You can sell your Right to Buy home, but there are a few more conditions than for the sale of a home bought privately. If you sell within five years, you might have to pay back a percentage of the discount you received – in some cases all of it. You’ll probably have to pay back a share of any profit you’ve made too, so you’ll need to factor all this in to your selling price (and your budget) if you’re planning