Everything you need to know about right to buy mortgage uk in the UK.
Right to Buy is a government scheme that allows eligible council tenants in England to purchase their rented home at a significant discount. Introduced in the 1980s, it has helped millions of tenants become homeowners. The scheme offers discounts of up to £96,000 in London and £72,000 outside London (2024/25 limits), making home ownership accessible to people who might otherwise be unable to afford a property.
The discount depends on how long you have been a public sector tenant. You need a minimum of 3 years as a public sector tenant to qualify, with the discount increasing the longer you have been a tenant. For houses, the discount starts at 35% and rises by 1% for each additional year, up to a maximum of 70%. For flats, it starts at 50% and rises by 2% per year, up to 70%.
To qualify for Right to Buy, you must be a secure tenant of a local authority (council) in England. You must have spent at least 3 years as a public sector tenant (this does not have to be continuous or with the same landlord). The property must be your only or main home, and you must not be subject to a possession order or bankruptcy restrictions.
Your discount is based on the property's market value (assessed by an independent valuer) and your length of tenure as a public sector tenant. The council cannot charge you more than the market value minus your discount.
For a house, after 3 years you receive a 35% discount, increasing by 1% for each additional year up to 70%. For a flat, after 3 years you receive 50%, increasing by 2% per year up to 70%. The maximum cash discount is capped at £96,000 (London) or £72,000 (rest of England).
For example, if you have been a tenant for 15 years and your council house is valued at £200,000, your discount would be 47% (35% + 12 additional years at 1%), giving you a discount of £72,000 (capped). You would need a mortgage for £128,000 or less.
💡 You may have to repay some or all of the discount if you sell the property within 5 years of purchase. The repayment is tapered: selling in year 1 means repaying 100% of the discount, year 2 is 80%, year 3 is 60%, year 4 is 40%, and year 5 is 20%. After 5 years, no repayment is required.
You need a mortgage to cover the discounted purchase price. Right to Buy mortgages are available from most mainstream lenders, though some have specific criteria for RTB purchases. The discount effectively acts as your deposit, which means you may be able to buy with no personal deposit if the discount is large enough.
For example, if the property is worth £180,000 and your RTB discount is £60,000, you need a mortgage of £120,000. The LTV based on the market value is 67% (£120,000 / £180,000), which qualifies you for competitive interest rates. Some lenders calculate LTV based on the discounted price rather than market value, so choose your lender carefully.
Mortgage affordability is assessed on your income and expenditure, just like any other mortgage application. Lenders typically apply the same criteria as for a standard residential mortgage, including income multiples of 4–4.5 times your gross annual income.
The Right to Buy application process typically takes 8–16 weeks from initial application to completion, though complex cases can take longer. The key steps are:
Buying your council home is a major financial commitment. Consider the ongoing costs that tenants do not pay: buildings insurance, maintenance and repairs, ground rent and service charges (for flats), and any future works to the building. Council leaseholders can face significant bills for major works, sometimes running into tens of thousands of pounds.
If the property needs significant repairs, these become your responsibility as soon as you buy. Have the property surveyed before committing to the purchase, and budget for any works identified. For flats, ask the council about any planned major works and associated costs.
⚠️ Council leaseholders (flat owners) can receive major works bills of £10,000–£30,000 or more for building repairs, roof replacements, or cladding remediation. Before buying a council flat, ask the council in writing about any planned or anticipated major works and their estimated costs. This information should be part of your decision to buy.
A mortgage broker experienced in Right to Buy can help you find the best mortgage deal, navigate the application process, and ensure the LTV is calculated in the most favourable way. They can also advise on the financial implications of buying versus continuing to rent.
Nesto matches you with FCA-regulated mortgage brokers who understand Right to Buy purchases. Find a mortgage broker through Nesto and take the first step towards owning your home.
Get matched with a specialist first-time buyer mortgage broker in under 2 minutes — free, no obligation.
Find my broker — it's free →