How to know if a Right to Buy mortgage is right for me?

Introduced in the 1980’s, the Right to Buy scheme was created to help council tenants in England to purchase their homes at substantially discounted prices.

The Right to Buy mortgage has been incredibly popular over the decades as it has evolved and in that time over a million homes have been purchased this way, helping people to get onto the property ladder and owning their own home.

How does a Right To Buy mortgage work?

The exact amount of discount that a person is entitled to will depend on the market value of the property, the type of property and how long you have been a public sector tenant.

Houses – After 3 years public-sector tenancy you are eligible for a 35% discount. After 5 years tenancy this increases by 1% for each additional year of public-sector tenancy.

Flats – After 3 years public-sector tenants become eligible for a 50% discount and after 5 years the discount increases by 2% for each extra year of being a public-sector tenant.

There is a maximum amount of discount as of writing this of £84,200 in England or £112,300 in London.

Who is eligible for a Right To Buy mortgage?

The rules vary for Wales, Scotland and Ireland but in England you may be eligible for the Right to Buy scheme if you;

  • Have been a public sector tenant for at least 3 years.
  • It will be your only or main home.
  • You are a secure tenant.

Eligibility will need to be verified by the relevant council and may require additional checks before you can proceed.

If I have bad credit can I still get a Right to Buy mortgage?

Of course, as with all types of borrowing, having good credit will always be easier, but just because someone has a poor credit score, or a less than favourable credit history does not mean they cannot successfully secure a Right to Buy Mortgage.

If you are hoping to get a Right to Buy mortgage but are worried about your credit, then it is a good idea to speak to a mortgage specialist who will be able to advise you on the steps that need to be taken and how to proceed. They will not only have knowledge and experience in dealing with bad credit Right To Buy mortgages but will have connections with specialist lenders who will offer terms to those with adverse credit.

Is the scheme right for me?

If you are looking to get on the property ladder, are a public sector tenant and have been for at least 3 years then this could be a great opportunity to own your own home. Saving up to buy on the open market can be out of reach financially for a lot of people, requiring a big deposit upfront and large monthly mortgage payments.

Right to Buy MortgageIn addition to the big discount given on the property, some lenders will allow the discount given by the authority to be used in lieu of a deposit which makes it even more attainable for some people who are unable to save.

If you are still unsure of how to proceed or if you are eligible for the scheme then seek advice from a mortgage advisor who will be able to help you navigate through the process and offer valuable support to get you the best deal possible.