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The Right to Buy scheme was first introduced in the 1980s to offer council tenants the opportunity to buy their homes at a price below the market value.
It is also possible to take out a mortgage for a property under the Right to Buy scheme, although it helps to know how it all works and what you need to do to apply.
We answer the most common questions asked about Right to Buy mortgages, giving you all the basics you need to get started.
If you are eligible for the Right to Buy scheme, you will need to apply through the gov.uk website, which you can do here .
When an application is approved, the council will issue a Section 125 notice, which is a formal offer to purchase your home. This document includes information such as the:
Anyone named on the Section 125 notice will need to be included in the mortgage application. Once the notice is issued, you have 12 weeks to decide whether you wish to proceed.
Your discount will be based on a few factors such as:
The maximum available discount is either 70% of the value of your property or the maximum discount for your region.
You can get more information about how the discounts work on the gov.uk website here.
We work with lenders who allow you to use the Right to Buy discount as a deposit.
Before you proceed to a full application, this is something we can advise you on based on the initial offer made by the lender.
Give us a quick call and one of our friendly advisors will let you know more about how this works and if it could be used in your application.
The bulk of the cost of a Right to Buy mortgage comes from the monthly repayments, which is split between the loan amount and interest.
How much you pay will depend on factors such as:
Each lender has its own criteria, so they may require additional information so they can offer a proper assessment of your application.
Yes – we work with lenders who offer Right to Buy mortgages to individuals with bad credit. This includes those with County Court Judgments (CCJs), defaults, and missed payments.
As with any mortgage application, we will need to provide the lender with an explanation for the adverse credit history, along with assurance that the new mortgage payments will not contribute to any further financial difficulties.
This varies depending on your circumstances, such as your income, credit history and the value of the property.
You can get a better idea of how much you may be able to borrow by requesting a quote based on some basic information you provide.
Get in touch with our team to discuss your options and they’ll be able to give you an initial quote based on your requirements.
Whilst there are some instances where this may be needed, in many cases it is not a requirement.
This is because some lenders allow you to use the Right to Buy discount as the full deposit.
For example, if your home is valued at £100,000 by the council and you are given a 25% discount, this would set the purchase price at £75,000.
There have been cases where lenders are willing to finance the full £75,000 without the need for the applicant to provide an extra deposit.
We also work with lenders who allow you to use the Right to Buy discount as a deposit.
Before you proceed to a full application, this is something we can advise you on based on the initial offer made by the lender.
Give us a quick call and one of our friendly advisors will let you know more about how this works and if it could be used in your application.
How much does a Right to Buy mortgage cost?
The bulk of the cost of a Right to Buy mortgage comes from the monthly repayments, which is split between the loan amount and interest.
How much you pay will depend on factors such as:
Each lender has its own criteria, so they may require additional information so they can offer a proper assessment of your application.
We work with several specialist lenders who are open to receiving applications for mortgages on these types of mortgages.
High street lenders tend to be more reluctant to offer mortgages for properties with known structural defects or without valid PRC certification.
Our advisors can give you more information about which properties are more likely to be accepted and help you find the right match for your finances.
If you intend to sell your Right to Buy property within 5 years of purchase, you will have to repay some or all of the discount.
The amount you need to repay depends on when you sell:
As an example, imagine you paid £120,000 to buy your home and were given a 40% discount worth £48,000 and sold your home after 2 years for £150,000.
40% of £150,000 is £60,000. This means you would have to repay 60% of £60,000 (£36,000) as you would be in your third year of ownership.
If you transfer ownership of the property to a member of your family, this may mean you do not have to repay the discount – although the landlord must agree to this.
Aside from the monthly repayments, the other fees you’ll typically need to cover are:
At Willows, we ensure you are made aware of the broker fees and lender fees involved, so you always know where you stand.
Feel free to get in touch and we can give you a better idea of how much the fees could be based on your mortgage requirements.
Getting a quote won’t affect your credit score
If getting a Right to Buy mortgage is the right option for you, and you need help finding the right lender, our team is waiting to take your call.
We’ll answer any questions you have about the process and important advice on the type of lenders that are best suited to your circumstances.
To find out more about how we can help, you can speak with a member of our team today by calling 01656 766 158.
If you have a question – we’d be happy to talk to you – simply call us…
(Mon-Fri 9am-8pm, Sat 10am-1pm)
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At Willows Finance Ltd, we appreciate that your privacy is extremely important to you. With this in mind, we have put in place a number of measures to ensure that any personal details we obtain from you as a result of visiting this website is processed and maintained in accordance with accepted principles of good information handling and also in accordance with the Data Protection Act 1988.
This statement provides you with details of the type of information we may hold about you, how we obtain and use information and how we protect your privacy.
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Authorised and regulated by the Financial Conduct Authority
Firm Reference Number: 670052
Company Number: 6678545 (Registered in England and Wales)
This document outlines the services we provide. If you need clarification, please contact us at 01656 766158.
We offer first and second charge regulated mortgage contracts for business or personal use.
Other finance options may include:
Regulatory Status:
We offer an advised mortgage broking service and provide enough information for you to make an informed decision.
We are not independent financial advisers. Free debt advice is available from the Money Advice Service.
You can view our privacy policy at: https://willowsfinance.co.uk/privacy-cookie-policy/.
Lenders may also have their own privacy policies which will be provided to you.
We charge a broker fee upon loan completion. The average fee is approximately 5%, depending on your situation.
Fee details:
No refund is offered after completion. You may pay upfront or add the fee to your mortgage. Fees and commission will be detailed in your ESIS and Mortgage Agreement.
You will receive a Mortgage Agreement and an ESIS document detailing:
You may cancel your application anytime before completion without any charge. Mortgages cannot be cancelled after completion.
Missing payments can lead to charges, repossession, and negative impacts on your credit rating.
Consolidating debt may result in higher long-term interest. Securing debt against your home increases risk.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loan secured on it.
If you wish to complain, contact us at:
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Tel: 01656 766158
You may be able to refer your complaint to the Financial Ombudsman Service.
We are covered by the FSCS. You may be eligible for compensation of up to £85,000 per person per firm for mortgage advice and arranging.
More info: www.fscs.org.uk
After processing your application, you’ll receive a Mortgage Agreement and have a 7-day reflection period.
Contact us during this period with any questions. To proceed, sign and return the agreement.
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