Right to Buy Mortgage

The Right to Buy scheme allows qualifying council tenants in England to purchase their rented home at a discount. A right to buy mortgage is a standard residential mortgage used to fund that purchase, with the discount often acting as all or part of the deposit. This guide covers how the scheme works in 2026, including the significant changes introduced in late 2024.

What Is Right to Buy?

Right to Buy is a government scheme that gives eligible council tenants in England the legal right to buy the property they rent at a price below market value. The scheme was introduced in 1980 and has helped millions of tenants become homeowners.

The discount you receive depends on how long you have been a public sector tenant, what type of property you live in, and where in England the property is located. The discount is applied directly to the purchase price, reducing what you need to borrow.

Eligibility in 2026

The eligibility rules for Right to Buy changed significantly following reforms announced in the October 2024 Budget.

To qualify, you must:

• Be a secure council tenant in England
• Have spent at least 10 years as a public sector tenant (increased from the previous 3 year requirement)
• Use the property as your only or main home
• Live in a self contained property (not shared accommodation)
• Not currently own another property
• Not have previously used the Right to Buy scheme to purchase a home (except in mitigating circumstances)

The increase from 3 to 10 years is one of the most significant changes in the scheme’s history. If you have been a tenant for fewer than 10 years, you will need to wait until you reach that threshold.

Discount Amounts

Maximum discounts were reduced substantially from 21 November 2024. The previous caps of up to £102,400 in England (or £136,400 in London) no longer apply to new applications.

The current maximum discounts are set at pre-2012 levels and vary by region, typically ranging from £16,000 to £38,000 depending on the local authority area. London boroughs of Barking and Dagenham and Havering have a maximum of £38,000.

The percentage discount structure remains:

• Houses: 35% discount after 10 years as a tenant, increasing by 1% for each additional year up to a maximum of 60%
• Flats: 50% discount after 10 years, increasing by 2% for each additional year up to a maximum of 70%

However, the percentage discount is now capped by the much lower regional cash maximums. For many properties, the cash cap will be the limiting factor rather than the percentage.

Can the Discount Act as Your Deposit?

Yes. One of the key advantages of Right to Buy is that most mortgage lenders will accept the discount as your deposit. If the discount gives you sufficient equity in the property, you may not need any personal savings at all.

For example, if the market value of your council home is £200,000 and you receive a discount of £30,000, the purchase price is £170,000. The £30,000 discount represents 15% of the market value, which many lenders will accept as the deposit. You would then need a mortgage of £170,000.

Some lenders will even offer 100% of the discounted purchase price if the discount itself provides enough equity against the market value. This means you could potentially buy with no cash deposit at all.

How to Apply for Right to Buy

The application process follows a set sequence:

1. Submit an RTB1 form to your landlord (the council). This is the official notice that you want to exercise your Right to Buy.
2. The council responds within 4 weeks (8 weeks for housing association tenants) confirming whether you qualify.
3. You receive an offer (Section 125 notice) setting out the purchase price, discount, and any conditions. This typically arrives within 8 to 12 weeks.
4. Accept or dispute the valuation. If you believe the valuation is too high, you can request an independent determination from the district valuer.
5. Arrange your mortgage and instruct a solicitor to handle the conveyancing.
6. Complete the purchase. You have 12 weeks from accepting the offer to complete, though extensions are sometimes granted.

Which Lenders Accept Right to Buy?

Most mainstream mortgage lenders offer products for Right to Buy purchases. The market is much broader than specialist mortgage types because the underlying property already exists and the discount provides built in equity.

Lenders assess your application based on standard affordability criteria: income, outgoings, credit history, and the loan amount relative to the property value. Having the discount as equity often makes the application stronger than a typical purchase with a small cash deposit.

A mortgage broker can compare products across the market and identify which lenders offer the best rates for your circumstances.

Buying with Family Members

You can make a joint Right to Buy application with up to three family members who live with you, provided they have lived in the property for at least 12 months. They do not need to be named on the tenancy.

Joint applications can improve affordability because the lender considers the combined income of all applicants. However, all applicants will be jointly liable for the mortgage.

Preserved Right to Buy

If your council transferred its housing stock to a housing association, you may have a preserved Right to Buy. This gives you the same right to purchase at a discount, but the process is managed through the housing association rather than the council.

The same eligibility criteria and discount structures apply. However, housing association tenants who do not have preserved Right to Buy may instead qualify for the Right to Acquire scheme, which offers smaller discounts (typically £9,000 to £16,000 depending on region).

Right to Buy in Wales and Scotland

Right to Buy was abolished in Wales on 26 January 2019 and in Scotland on 1 August 2016. Tenants in these countries cannot use the scheme to purchase their homes.

In Northern Ireland, a separate House Sales Scheme operates with different rules and discount levels.

Risks: Repayment of Discount

If you sell your Right to Buy property within 10 years of purchase, you must repay some or all of the discount. The repayment window was doubled from 5 years to 10 years as part of the 2024 reforms.

The repayment is calculated as a percentage of the current market value at the time of sale, not the original discount amount. In the first year, you repay 100% of the discount (as a proportion of value). This reduces each year over the 10 year period.

Additionally, local authorities now hold a right of first refusal in perpetuity. If you decide to sell at any point, you must offer the property back to the council before selling on the open market.

Frequently Asked Questions

Can I use Right to Buy if I receive housing benefit?

Yes. Receiving housing benefit or universal credit housing element does not disqualify you from Right to Buy. However, you still need to demonstrate mortgage affordability to a lender.

Can I use Right to Buy with bad credit?

It depends on the severity. The Right to Buy discount provides equity, which helps. Some lenders specialise in adverse credit and may consider applications with defaults, CCJs, or missed payments. A broker can identify suitable options.

What costs are involved beyond the mortgage?

You will need to budget for solicitor fees, a mortgage valuation (or survey if you choose a more detailed inspection), and ongoing costs of homeownership including buildings insurance, maintenance, and any service charges if buying a flat.

Can I rent out my Right to Buy property?

There is no blanket restriction on letting, but you must repay the discount (proportionally) if you sell within 10 years. Some mortgage lenders require you to live in the property, so you would need to remortgage to a buy to let product if you wanted to let it out.

What happens if the council delays the process?

The council has set timeframes to respond at each stage. If they miss these deadlines, you can serve a notice of delay. If the delay continues, you may be entitled to a reduction in the purchase price.

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Related: First Time Buyer Mortgages | Bad Credit Mortgages

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