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Right To Buy Scheme - Mortgage Advice Centre

What is Right to Buy?

Right to Buy is a Government scheme that helps you to buy your council house or flat. If you’re a council tenant and have been for at least three years, then you have the right to buy your home, with a discount from the council to do so.

How does Right to Buy work?

The scheme applies everywhere in the UK and the longer you’ve been a council tenant, the bigger the discount you’re entitled to. The discount can actually be used as your deposit, which makes it possible to get a mortgage without a lot of personal savings.

 

How do I use my Right to Buy?

The first step is to apply to your local authority and declare that you want to buy your council property. They will send a chartered surveyor over to the property to value it. The council will then calculate your discount.

As long as your rent is up to date, and there are no outstanding complaints, you should have a good chance of being approved for Right to Buy.

 

How do I get a mortgage for Right to Buy?

Once you have an offer letter from your local authority you can start looking for a mortgage.

You‘ll need to know what the council has valued the property at and the discount you’re entitled to. The maximum discount in the UK is £84,200, unless you’re in London, where it’s
£112,300.

Can I let out or sell my Right to Buy property?

No, you won’t be able to get a Buy to Let mortgage on a Right to Buy home – it has to be a residential mortgage. You can only let the property once you have lived in it for a minimum of five years.

The same goes for selling the property. If you sell within the first five years, your Right to Buy discount no longer applies and you will owe money back to the council

After five years, the council lifts the ‘legal charge’ on the property and you’re free to do what you choose with it.

What is Right to Acquire?

Right to Acquire is a similar scheme, applying to housing association tenants. However, the discount is significantly smaller – between £9,000 and £16,000. Again this varies according to where you live. Generally, the closer to London you are, the bigger the discounts.

You can get an idea of the discount you might gain on the government website.

How long does it take to buy a council or housing association property?

Once you’ve received your offer from the council/housing association, they normally give you a period of three months in which to arrange your mortgage. Quite often the process is completed more quickly than this.

Occasionally the council will have to instruct their own solicitors and this can sometimes slow the process. If it ends up taking longer than three months, it’s usually straightforward – the council will issue new offer letters and the process continues.

What does it all cost?

The fact that you can use the discount as the deposit for your mortgage deposit is a major advantage of Right to Buy.

You will need a certain amount of additional money to cover stamp duty, depending on the rules at the time when you’re buying. Currently no stamp duty is payable on properties up to a value of £300,000 for first time buyers. This will change, so do seek advice.

You will also need to cover need some legal costs. A solicitor often costs £1,000 to £2,000. There may also be mortgage fees to pay as well.

How can Mortgage Advice Centre help?

We have helped many customers use their Right to Buy. We’ll talk you through the whole process and find you a suitable mortgage at a good rate. The Mortgage Advice Centre makes it fast and easy to get on the property ladder.F

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