The right to buy was a scheme first introduced in 1980 and allows council tenants to purchase their rented homes at a reduced price so they can become homeowners.
Owning your own property has many benefits. Better financial security, as well as being able to pass down the property to your children, are often mentioned by borrowers who are keen to purchase instead of continuing to rent from the local authority.
You are able to purchase your council home providing you meet the following criteria:
Historically, you needed to be a council tenant for a minimum of 3 years. However, due to recent government reforms designed to protect social housing stocks, the minimum qualifying tenancy period is increasing to 10 years. If you are keen to own the property instead of just renting, this scheme could still be perfect for you, provided you meet the new timeline requirements.
Although both Right to Buy and Right to Acquire are housing schemes that allow tenants of social housing to purchase their homes, there are some key differences to understand.
Right to Buy: This scheme is aimed towards council tenants who are offered the opportunity to purchase their home with a discount.
Right to Acquire: This scheme is offered to tenants renting from Housing Associations. The properties are managed and owned by registered social landlords, and whilst they do still offer discounts, they are capped at £16,000.
If you have bad credit and are looking to purchase under the Right to Acquire scheme, you will likely find it more difficult. There are far fewer lenders offering Right to Acquire mortgages, and those that do will require you to substantially contribute towards the deposit since the discount is capped.
Nobody knows exactly how much longer the scheme will continue in its current form due to reduced social housing stocks and government pressures. The Right to Buy scheme in Scotland ended in July 2016, and in Wales, it finished in January 2019. In England, the scheme recently underwent its most restrictive reforms in its history.
If you live in a council property, qualify for the scheme, and have a desire to buy your home, our advice is simple: act now and explore your options before further policy changes take effect.
Following government reforms in late 2024, the maximum cash discounts were significantly reduced to protect local housing markets. Depending on your region in England, the maximum cash discount is now capped between £16,000 and £38,000. The exact percentage you receive depends on how long you have lived there and whether you are buying a house or a flat.
If you sell your council home within the repayment window (which has recently been extended from 5 years up to 10 years under new rules), you will need to pay back some or all of the discount you received. The exact amount will depend on how long you have owned the property.
Additionally, even after your discount repayment period has ended, you must still offer the property back to the council or housing association before you are able to put the property on the open market if you have owned it for less than 10 years.
In many cases, you may not have to use your own funds to add to the deposit due to the discount acting as your equity. Most lenders will accept the Right to Buy discount to be used as a 100% source of your deposit.
Absolutely! If you have bad credit and are looking to buy your council home, the scheme could be perfect for you, as the discount awarded acts as equity to support your application.
Depending on the level of adverse credit showing on your file, your application may need to be submitted to a specialist lender. The good news is there are plenty of lenders who will accept your application even with past credit issues like defaults or CCJs.
Even though the council will have provided you with a valuation for the property when granting your Right to Buy offer, the lender will still want to instruct their own surveyor. They need to ensure it meets their property criteria, is in good condition, and is worth the money you are paying for it.
Estimated costs: Free to £500
You will need to instruct a solicitor to act both for you and the lender to ensure all conditions of the mortgage are met. They will also be responsible for registering you as the owner at the Land Registry.
Costs can vary greatly depending on which council you are buying from and which lender you are applying for a mortgage with. All lenders have their own unique requirements that must be completed before you can draw down the funds.
Estimated costs: £1,200 – £2,000
We always recommend working with a mortgage advisor who understands the scheme and is best placed to advise and support you. If you have adverse credit, working closely with a specialist bad credit mortgage advisor is essential to ensure you receive the best possible mortgage for your circumstances.
Estimated costs: Free – £1,995 depending on the complexities of your case and the time required to secure you a binding mortgage offer.
Whatever your current property goals are, finding the right specialist lender requires expert market knowledge. Whether you are focused on this specific step or exploring other borrowing options, Adverse Mortgage Advisors is here to guide you. Visit our complete mortgage help hub to explore dedicated advice for first time buyers, home movers, landlords, and anyone needing to navigate the property market with a complex credit history.
If you would like to understand more about the Right to Buy scheme or if you would like to get the ball rolling, contact us today or call us on 01268 294 777 to find out what the best options are for you.
If you have questions about getting a mortgage with an adverse credit score, read our FAQs. Our wealth of knowledge within this market means that we’re confident in our ability to offer specialist mortgage advice and secure the mortgage you want regardless of your credit history.
A Right to Buy mortgage is a type of mortgage designed for council tenants who have the legal right to purchase their rented home, often at a greatly discounted price. The scheme allows council tenants who want to buy their rented home to borrow money to purchase the property, similar to other mortgages.
To qualify, tenants must meet specific government criteria, including having been a council tenant for a certain period, the property's value, and receiving a Right to Buy offer proposal from their local council.
Getting a Right to Buy mortgage while on benefits is possible but might be harder. Lenders consider your ability to repay based on your income, which includes benefits. However, some lenders might have specific rules about which benefits they accept.
It's essential for tenants considering a Right to Buy mortgage to carefully assess their financial situation, to ensure they can afford the mortgage repayments and any associated costs, such as maintenance and insurance, before proceeding with the purchase.
Our mortgage advisers can talk you through your options and find lenders willing to work with you.
Getting a Right to Buy mortgage with bad credit is often much easier than applying for a standard mortgage with bad credit, the reason for this is the Right to Buy discount which can be as much as 50% of the property value can be used as your deposit.
This means you will have a very large deposit to support your Right to Buy mortgage application. Lenders will check your credit history and income.
We can provide you with advice that will improve your chances.
Yes, you can get a Right to Buy mortgage with bad credit, and the good news is you will be able to use your discount as your deposit which often means your deposit will be substantial giving you access to the lenders lowest interest rates for the scheme.
The biggest obstacle you will face is that made credit lenders will have stricter policies on property types which can often rule out ex local authority properties due to the construction type, quite often houses especially those built in the 60’s may have been built using concrete.
Finding bad credit lenders willing to lend on apartments/flats can also be challenging, and the lack of lenders offer Right to Buy with bad credit can often lead to paying higher interest rates.
We know the lenders that specialise in bad credit mortgages and understand the options that will be available to you in your situation. Speaking to us first can increase your chances of finding a suitable mortgage option.
In most cases you will not need to use any of your own funds as the discount offered to you by the council for the Right to Buy scheme is often substantial and can be as high as 50% of the property value, this discount can be used as your source of deposit.
This is hugely beneficial for people with bad credit as raising a sufficient deposit to support an application with bad credit can often be the main sticking point.
Check with our specialists to understand the exact deposit needed in your situation.
Here are simple steps to get a Right to Buy mortgage with bad credit:
Following these steps can improve your chances of getting a Right to Buy mortgage with bad credit.
Here at Adverse Mortgage Advisors, we understand your situation and the requirements of the lenders so we can help you to understand what is necessary to secure you the best mortgage for your circumstances.
