If you currently rent a council house or are a tenant of a housing association, you may be eligible for the Right to Buy scheme. This scheme could help you buy your rented home and get on the property ladder faster.
Not sure where to get started? In our in-depth guide, we'll explore how the scheme works, how you can apply and where to get help and support.
What is the Right to Buy scheme?
Right to Buy is a government-backed scheme introduced in 1980. It helps people who rent council houses or housing association homes get on the property ladder. The government has launched pilot schemes in many areas since its introduction.
If you qualify for the scheme, you could enjoy a huge discount, which increases each tax year, in line with inflation. That means you could save tens of thousands of pounds towards the purchase of your home. To date, the maximum discount you can get is: £87,200 if you live in England and £116,200 in the capital London.
How do you qualify for the scheme?
The Right to Buy scheme is only currently eligible to council house and housing association tenants in England. While a similar scheme existed in Scotland, it ended on 31 July 2016. The Welsh scheme also ended in 2019.
If you'd like to apply, you could be eligible for a discount under the Right to Buy scheme if:
- You've been a public sector tenant for at least three years
- You don't part-own your home with your local Council
- You are or were a former housing association tenant
- You rent from a housing association, NHS trust, the council or another public sector landlord
- You plan to buy a home that will be your main residence
Am I eligible for Right to Buy if I live in Northern Ireland?
The House Sales Scheme for housing association tenants closed and the application deadline was 27 August 2022. Under the scheme, residents could qualify for a discount of up to £24,000 if they had five years of housing association tenancy.
If you missed the deadline, the Housing Executive's House Sales Scheme may be an option. The scheme can help you buy your home at a discount if you're a Housing Executive or housing association tenant.
How does Right to Buy work?
Organisation is key to making the Right to Buy process smoother - and even faster. Here are six key steps according to the government's Own Your Home site:
- Determine and get advice on what you can afford - Looking at your finances and budget with an expert can help you work out whether you can afford your home.
- Fill out your RTB1 application form - You can get a copy from your landlord or fill it out online.
- Wait for your landlord to respond - Depending on how long you've been a tenant, your landlord has up to eight weeks to confirm whether you're eligible.
- Receive your offer notice - If you're eligible, your landlord will send you an offer notice, which states your home's valuation, condition, price and what discount you're entitled to.
- Get the ball rolling - Once you've accepted your offer, you'll need to appoint a solicitor, get a survey and finally arrange a loan or mortgage to pay off your home.
- Complete the purchase of your home - If you agree with to landlord's terms, all you have left to do is make any necessary payments and complete your purchase.
Any home buying process takes time. But, your landlord must stick to a timescale when they process your Right to Buy application.
If you qualify, the government will grant you a discount based on how long you've been a tenant. For example, if you've been a tenant between three to five years, you'll get a 35% discount if you live in a house and 50% discount if you live in a flat.
Once you've been a tenant for over five years, you'll get a 1% discount for every extra year of tenancy if you live in a house and 2% if you live in a flat.
Do you need a deposit for Right to Buy?
Not all lenders will require that you need a deposit to be eligible for the scheme, so it's wise to check with your lender first.
Get advice from a financial adviser or mortgage broker if you can afford it. They can help you compare lenders across the market, work out your affordability and give you recommendations on options.
Are they stopping the Right to Buy scheme for council houses?
The Right to Buy scheme is still available in England for many council house tenants. But, as the scheme is only offered by some councils, you'll need to check whether it's an option in your area.
The government's Own Your Home Right to Buy eligibility quiz can help you discover whether you're eligible and find useful information on how to start your application. If you'd rather talk to someone on the phone, you can also call their helpline on 0300 123 0913.
Is the housing association Right to Buy scheme being extended?
To date, the government has extended the Right to Buy scheme for housing association tenants in certain areas. Unfortunately, if you live in the Midlands, you won't be able to apply for the scheme, but there are plans to extend pilot schemes in new areas in the UK.
What is the Right to Acquire scheme?
If you're not a council tenant, you may be eligible for the Right to Acquire scheme if you live in England. The scheme allows housing association tenants the chance to buy their homes at a discount, if both they and their landlords meet certain criteria:
- You've been a housing association tenant for at least three years
- Your landlord is the council, armed services, a housing association, NHS or a foundation trust
- Your home is your main residence and a self-contained property
Your home must also have been built or purchased by a housing association from after 31 March 1997 onwards. Your property may also be eligible if it was transferred to a housing association from your local council after this date.
If you qualify, you can get a discount relative to where you live. This can be anywhere between £9,000 and £16,000 to put towards purchasing your home. You can check the discounts available for your location or speak to your landlord to find out how much you could be eligible for.
How much deposit do you need for the Right to Acquire scheme?
You may need to pay a deposit under the Right to Acquire scheme. To find out how much you may have to pay, you'll need to speak to a mortgage broker. They'll help you work out what you can afford, based on your personal circumstances and budget.
How to decide whether to buy your housing association home
Pros
- If you decide to continue renting your home, you can always change your mind
- Discounts are increased every year in line with the rate of inflation
- Your discount could help you get on the property ladder faster
- Buying the home you rent means you can finally put your stamp on the property, whether it's knocking through a wall or choosing a new colour scheme
- Building equity by paying off your mortgage can help you invest in your current or next home
Cons
- Rising house prices may mean your home isn't as affordable - even with a discount
- Buying a home is a huge commitment - be sure you can afford repayments before making your application
- Failure to make your mortgage repayments mean you could lose your home
- Not getting a survey could mean your home is more expensive to own in the long run
- As a homeowner, any repairs are now your responsibility
How to check your affordability
Not sure whether you can afford to buy your council or housing association home? The Own Your Home website offers a Right to Buy house calculator that can help you see how much discount you could get on your house.
Where can you get advice?
Your landlord will be able to answer many questions such as how much discount you can get or how the scheme works.
The UK government's Right to Buy agent service can also point you in the right direction. They offer free advice on filling out your application, where to get legal advice and more.
And, if you'd like personalised recommendations on mortgage rates and options, speak to a mortgage adviser or broker. A financial adviser can also help you compare market rates and mortgage providers. They can also tell you whether you can afford mortgage repayments with cost of living on the rise.
Editor's note: This article was originally published in April 2015 and has been updated for accuracy and freshness.