Right to Buy mortgage scheme

Right to Buy is a scheme in England that allows most council tenants, as well as some housing association tenants, to buy their home at a discount. The scheme has been around for over 40 years, having been introduced by Margaret Thatcher in the Housing Act 1980, with more than two million tenants buying a home through it since then.

Right to Buy is also available in a limited format in Northern Ireland – for more information if you're in Northern Ireland, see the NIdirect website.

The scheme was abolished in Scotland in 2016 and Wales in 2019 (a means of protecting social housing numbers) so Right to Buy is not available there.

Right to Buy scheme eligibility

For those in England, you can apply to buy your council home if:

• It's your only, or main, home. So you'll need to be living in the property. 

• The property is self-contained. In other words, you don't share any rooms – such as your kitchen, bathroom and toilet – with people outside your immediate household.

• You're a secure tenant. That means there's a legal contract between you and your public sector landlord.

• You've had a public sector landlord for at least three years. For example, a council, housing association, NHS trust or the armed forces. This doesn't have to be three years in a row and can have been across multiple homes.

• You have no legal issues with debt. For example a county court judgment.

If you don't want to buy alone, it's possible to make a joint Right to Buy application.

A joint application could be with someone you share your tenancy with, or a spouse/civil partner. Alternatively, you can make a joint application with up to three family members who have lived with you for the past 12 months – even if they don't share your tenancy.

But do note that some types of property – such as those owned by the armed forces – are exempt from the Right to Buy scheme. There's a handy Gov.uk document which shows the types of property that are exempt.

Also see Gov.uk for more information on eligibility or skip to our section on how to apply.

There are no hard and fast rules around who should be responsible for financing the purchase of a council home through Right to Buy.

This means that a family member (or somebody else) could technically finance the purchase of your council home on your behalf.

However, legal ownership of the property would have to be in the names of those on the Right to Buy application form.

Those who qualify for Right to Buy can get a discount off the market value of the home they live in. 

Theoretically the biggest discount possible is £38,000, though how big a discount you can actually get depends on where you live, if it's a house or flat and how long you've been a public sector tenant for. Here's how it works:

Living in a council house

• Public sector tenant for between THREE and FIVE years? Here you'll get a 35% discount off the market value of your property, up to a maximum of your regional cap (details of regional caps in table below) – whichever is lower.
  

• Public sector tenant for MORE THAN FIVE years? After five years, the discount goes up by one percentage point for every extra year you've been a public sector tenant, up to a maximum of 70% or your regional cap – whichever is lower.

Living in a council flat

• Public sector tenant for between THREE and FIVE years? Here you'll get a 50% discount off the market value of your property, up to a maximum of your regional cap – whichever is lower.

• Public sector tenant for MORE THAN FIVE years? After five years, the discount goes up by two percentage point for every extra year you've been a public sector tenant, up to a maximum of 70% or your regional cap – whichever is lower.

The table below sets out the maximum discount you can get by region:

There are four steps you'll need to take if you want to apply to purchase your council property under the Right to Buy scheme (this doesn't include securing a mortgage, which we'll discuss below).

Here's what you need to do:

1. Fill in an RTB1 application form. Follow the link to the form and it tells you all the information you'll need to include and send to your landlord.

2. Send the application form to your landlord. Once you've completed the online form, you can save, print and sign it. Send the printed form by recorded delivery to your landlord (so you know once it's been delivered).

3. You'll then get an answer as to whether your landlord is willing to sell. Your landlord must respond within four weeks of your application (eight weeks if they've been your landlord for less than three years). Where the answer is no, the landlord should state their reasons for declining.
   
   You'll only be able to appeal against a 'no' if the reason for being declined is that the property you want to buy is suitable for elderly people. To do this, you'd need to appeal to a tribunal.

4. If your landlord agrees to sell, they will send you an offer. This offer must be sent within eight weeks of their agreeing to the sale if you're buying a freehold property, or 12 weeks if you're buying a leasehold. The offer will include details of:

• The price they think you should pay for the property and how it was worked out.

• Your level of discount and how it was worked out.

• A description of the property and any land included in the price.

• Estimates of any service charges for the first five years.

• Any known problems affecting the property's structure, for example subsidence.

You'll have 12 weeks after you get your landlord's offer to tell them whether or not you want to buy the property. Once this time is up, your landlord will then send you a reminder if you haven't replied to the offer. You have 28 days to reply to them, or the landlord could drop your application.

Don't worry: you can pull out of the sale and continue to rent at any time.

What happens if I disagree with my landlord's offer? 

If you disagree with your landlord's offer and think they have set your home's market value too high, you have to write to them within three months of getting the offer and ask for an independent valuation. A district valuer from HM Revenue & Customs (HMRC) will then visit your property and decide how much it's worth.

You'll have 12 weeks to accept HMRC's valuation or pull out of the sale.

To get a reduction because of a delay, fill in the  'Initial notice of delay' form (RTB6) and send it to your landlord. Your landlord must then either move the sale along within one month or send you a 'counter notice'. The counter notice will say that it has already replied, or explain why it can't speed things up.

If your landlord doesn't reply within a month of getting the RTB6, fill in the 'Operative notice of delay' form (RTB8). This means any rent you pay while waiting to hear from your landlord could be taken off the sale price. You can do this each time your landlord is late getting back to you.

Don't forget you'll need to apply for a mortgage too

If you decide to buy your home, ultimately you're responsible for financing the purchase – your landlord can't arrange this for you. This means you'll have to go through the same process of applying for a mortgage as anyone else buying a property (with or without the Right to Buy).

Buying a property is a big decision and not something that should be taken lightly. Consider all the costs, not just the mortgage repayments. You'll have additional costs and responsibilities you may not have had as a tenant, such as repairs and maintenance. And if the property is leasehold – which most flats are – you'll probably have to pay a service charge to the housing association/council for maintenance of the building and surrounding area (see our guide on the difference between leasehold and freehold properties).

If this is the first home you'll have owned, have a read of our First-time buyers' guide beforehand for what to expect during the home-buying process, including surveys and applying for a mortgage. We've also got a Cheap mortgage finding guide with tips on how to find the right mortgage for you, including the benefits of using a broker.

Where you're struggling to get a mortgage because you've got a small or no deposit, you could consider applying for a Barclays 100% mortgage – only available to people using Right to Buy. For more information on these mortgages, it's best to speak with a broker.

You can sell the property, but it comes with some caveats. It's not as easy as buying it with a big discount and then being able to sell it off at full market value whenever you like and to whomever you like.

If you sell the property within 10 years of buying it through Right to Buy, you'll first have to offer it either to your old landlord or to another social landlord in the area. Where the landlord wants to rebuy the property, it should be sold at the full market price agreed between you and the landlord. If you can't agree, a district valuer will say how much your home is worth and set the price.

Your landlord has eight weeks to respond to the offer. If they don't get back to you, you can then sell your home to anyone after this time.

You must PAY BACK the discount if you sell within five years

If you sell your home after five years, you won't need to repay any of the discount you got through Right to Buy. But if you sell the property within five years, you'll also have to pay back some, or all, of the discount. 

For example, if you sell within the first year of homeownership you'll need to pay back ALL of the discount. After that, the total amount you pay back reduces to:

• 80% of the discount in year two of homeownership

• 60% of the discount in year three of homeownership

• 40% of the discount in year four of homeownership

• 20% of the discount in year five of homeownership

The amount you pay back also depends on the value of your home when you sell. So if your property has increased in value since you bought it, this will increase the amount you repay.

For example, let's imagine you bought your home through Right to Buy. It was valued at £100,000 at the time, and you got a 35% discount, so £35,000 off, meaning you paid £65,000 in total. You then decide to sell your home 18 months later, but it's now valued at £120,000. As 35% (the discount you got originally) of £120,000 is £42,000, and you're in your second year, you would repay 80% of £42,000, which is £32,000.

You may not have to pay back the discount if you transfer ownership of your home to a member of your family. But you'll need to agree this first with your landlord and then get a solicitor to do this for you.