Right to Buy: An alternative route onto the property ladder.

Council houses are a vital asset in our communities, providing people with secure, affordable accommodation at controlled rents. But, what about council tenants with aspirations to own their home? Right to Buy could be an alternative route onto the property ladder.

What is Right to Buy?

The Right to Buy scheme was first introduced in 1980 by Margaret Thatcher’s Conservative government as a way for council tenants to buy the council house they live in at a discounted price.

The scheme has gone through some changes over the years, but still offers a route on to the property ladder for social housing tenants who otherwise may not be able to purchase their own home.

The scheme isn’t without criticism. Of the over two million council homes sold via Right to Buy, only 2% of these properties have been replaced. This has led to a shortage of affordable long-term council accommodation, with people in need finding themselves on long waiting lists.

Right to Buy is still available in England and Northern Ireland (with slightly different rules) but was abolished in Scotland in 2013 and Wales in 2017.

In England, the discounts are:

• Houses - An initial 35% discount if you’ve been a public sector tenant for between three and five years. After five years, the discount goes up 1% for every extra year you’ve been a public sector tenant, up to the maximum discount amount for your region (more on that below).
• Flats - An initial 50% discount if you’ve been a public sector tenant for between three and five years. After five years, the discount goes up 2% for every extra year you’ve been a public sector tenant, up to the maximum discount amount for your region (see below for more info).

If you applied to buy your home before 21st November 2024

The maximum discount you can get is whichever of the following is lower:

• 70% of the value of your property.
• £136,400 if your home is in a London borough.
• £102,400 if your home is outside London.

If you applied to buy your home after 21st November 2024

The maximum discount you can get is whichever of the following is lower:

• 70% of the value of your property.
• The maximum discount for your region.

Things to remember

There are other restrictions to who can apply and in what circumstances. You can check out the Government’s page on Right to Buy for all the current information and advice.

However, most tenants in England will be eligible to buy their council home, if they meet the following criteria:

• It’s their only or main residence.
• They’re a secure tenant.
• They’ve had a public sector landlord (for example, a council, housing association or NHS trust) for three years, which don’t need to be consecutive.
• The property is self-contained, meaning it has its own kitchen, living room, and bathroom.

What are the benefits of the Right to Buy scheme?

There are several benefits to buying your council house or flat using the Right to Buy scheme. Here are a few of the most common ones:

• If you want to buy your council home, the discounts can make it cheaper in comparison to a private sale.
• The longer you’ve been renting your council home, the bigger the discount you could get.
• It gives you the stability of owning your home and you don’t have to move house.
• You don’t have to have a deposit.
• You don’t have to pay rent, and your monthly payments will go towards an asset of your own that you can pass on to children or grandchildren as inheritance.
• Once the discount is factored in, you can borrow up to 100% of the purchase price through Together.
• Once you’ve owned the property for five years, you can sell it on without having to pay back the discount or any share of the profit if it’s gone up in value.

Are there risks or challenges with the Right to Buy scheme?

Although there are many positives to buying your own council house using the scheme, it’s important that you are aware of some of the risks, challenges, and restrictions you may face. Here are a few of the common considerations you need to know about:

• Your discount amount may be less if your landlord has spent money on building or maintaining your property.
• If you’ve applied after 21st November 2024, the discount amount will be significantly lower (between £16,000 and £32,000 depending on where you live). This means that you may need to contribute to a deposit, and you may also find it harder to get a mortgage.
• You will be solely responsible for any bills relating to the property, including utilities, service charges, as well as repair and maintenance costs.
• Even if you don’t need a deposit, there can be other fees and charges associated with taking out a mortgage (such arrangement fees, valuation fees and broker fees). Make sure to factor these in and consider all the costs involved.
• Your home may be repossessed if you don’t keep up with your monthly mortgage repayments.

Is Right to Buy right for you?

In this article, we’ve discussed some of the benefits and challenges surrounding Right to Buy, and hopefully you feel more informed on the topic. But, as with any property purchase, whether it’s right for you depends on your unique circumstances. The scheme can help people move from renting to owning, but you should make sure you understand all the potential risks and restrictions before applying. The Government’s Right to Buy pages are a good resource and will also help you keep up to date with any upcoming changes to the scheme.

At Together, we’ve been able to help many people purchase their properties through the Right to Buy scheme. We’re flexible when it comes to credit history, accept benefits income, and our team will always make quick, common-sense decisions that consider your personal circumstances, instead of just criteria. Ready to get started? Find out if we can help you get on the property ladder with our Right to Buy mortgages.