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Right to Buy Mortgage

Right to Buy mortgage scheme helps social housing or council tenants who have been in situ at their home for at least three years to purchase their property.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-02-13
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Right to Buy Mortgage

The Right to Buy mortgage scheme helps social housing or council tenants who have been in situ at their home for at least three years to purchase their property.

This scheme applies to tenants who have lived in different properties for three years, and applicants do not, therefore, have to have lived in the same home consecutively for three years to be eligible.

How Much Can I Borrow on a Right to Buy Mortgage?

The amount of lending available depends on the market value of your home, how long you have been a tenant, how much of a deposit you can put down, and other assessment criteria such as affordability. If you are unsure of whether you would be able to apply, or whether you meet the criteria for a Right to Buy mortgage, get in touch with business loan broker and we will be delighted to help you understand the process, and what your best options are.

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Right to Buy Mortgage Lenders Criteria

The scheme carries eligibility criteria around the applicant and the property in question:

  1. The applicant must not have any debt problems or be being legally pursued for debt repayments
  2. The applicant must not have any outstanding possession orders in place
  3. The property must be the applicant's main residence or their only home
  4. The property must not be specialist housing designed for elderly or disabled tenants
  5. The property cannot be on a demolition schedule

How Does Right to Buy Mortgage Affordability Work?

Being able to demonstrate affordability and the ability to keep up with your mortgage repayments is essential before considering any mortgage application.

Every lender will carry out affordability assessments before they can make any mortgage offer.

Depending on your home and other circumstances, discounts and subsidies will be available, so it is essential to understand what you can afford and how much your repayments are likely to be.

You can access mortgage calculators to estimate the required repayments or give the team at Revolution Finance Brokers a call, and we will be happy to walk through the process with you.

Usually, your monthly outgoings will remain consistent with your existing rent.

However, there are other costs to consider, including property insurance, arrangement fees and survey fees.

Ensuring you know about all the cost implications is essential before taking out a Right to Buy mortgage.

Applying for the Best Right to Buy Mortgages

Once you have considered the eligibility criteria and are confident that you can afford to keep up with repayments, the first step in securing a Right to Buy mortgage is completing the RTB1 form, the Right to Buy scheme application form.

You can complete this form online or obtain a paper copy from your landlord or housing association.

You can apply as an individual if you are the only tenant or can make a joint application including up to three family members, provided you have lived together at the property address for at least 12 months.

The application process usually takes between 4-8 weeks, and if your application is rejected, the landlord will advise you why. If your application is approved, you will receive a mortgage offer.

Receiving an Offer From Right to Buy Mortgage Lenders

Once a Right to Buy application is approved, the landlord will issue an offer notice called an S125.

This form usually takes around eight weeks to be issued for a freehold property or about 12 weeks for a leasehold property.

Your S125 will explain how much the property has been valued and what subsidy you will receive against this valuation.

Any structural issues identified during the valuation process will also be explained, along with any applicable terms.

How Can I Use a Right to Buy Mortgage Calculator to Estimate My Discount?

The discount you get depends on the type of property in question and how long you have been a tenant.

  • For houses, the introductory discount currently stands at 35% for tenants who have been in residence for up to 5 years.
  • This discount is extended by 1% for every additional year you have been a tenant, to a maximum of 70% or £82,800.
  • This cap is extended to £110,500 in London.
  • For flats, the introductory discount currently stands at 50% for tenants who have been in residence for up to 5 years.
  • This discount is extended by 2% for every additional year you have been a tenant, to a maximum of 70% or £82,800.
  • This cap is also extended to £110,500 in London.

What to Do If Your Right to Buy Mortgage With Bad Credit is Turned Down

If your landlord rejects your application or does not respond within the deadlines, you have the right of appeal. This also applies if you disagree with the property valuation.

Can I Get a Mortgage for Right to Buy With Bad Credit?

Bad credit applicants are strongly advised to seek advice from an independent broker, who will recommend lenders with flexible criteria for adverse credit issues.

Using a Mortgage for Right to Buy Scheme Purchases as a Retiree

If you are retired and a tenant of social housing or council housing, then you have the option of applying for a Right to Buy mortgage. The main criteria are affordability rather than age, so if you can demonstrate that you can afford to keep up with the mortgage repayments, there is no reason that you could not apply to access the Right to Buy scheme. Should you need any help understanding whether you can apply, or what the process is, give our expert team a call and we will work with you to help make sure your Right to Buy application is successful.

Being self-employed can make it more challenging to demonstrate affordability and thus your ability to keep up with repayments.

However, suppose you have regular income and are confident that you can afford the mortgage repayments. In that case, you are as eligible to apply to the Right to Buy scheme as any employed person.

The essential factor is to show that your regular income will cover the mortgage repayments and fit with the lending criteria received as part of a mortgage offer.

Expert Advice from the UK Right to Buy Mortgage Broker

Right to Buy is a scheme intended to make it possible for housing tenants to purchase their homes at a discounted cost and an affordable rate.

Revolution Finance Brokers are proud to have a long history of successfully helping applicants navigate the Right to Buy scheme, understand their options, complete the application process, and achieve their aspiration of owning their own home.

If you need any advice or support with the process, give us a call at 0330 304 3040 or drop us an email at [email protected] today.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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