Right to Buy explained: Buying your council house

The Right to Buy government scheme gives people the chance to buy the council house they are currently renting at a discounted rate. While the Right to Acquire scheme if designed to allow housing association tenants to buy their property. We explain how these schemes work, who is eligible, how to apply and things to watch.

Angela Kerr Director, Editor

What is Right to Buy?

The Right to Buy scheme is designed to allow council tenants to buy their council home at a discount. Approximately 2 million homes have been sold in this way over the last 30 years. 

Right to Buy eligibility

In England, you can apply to buy your council home if:

• It’s your only or main home
• It’s self-contained
• You’re a secure tenant
• You’ve had a public sector landlord (such as a council, housing association or NHS trust) for three years. It’s worth noting it doesn’t have to be three years in a row

Right to Buy eligibility criteria also includes having no legal issues with debt or any outstanding possession orders. The government’s eligibility quiz can also give you a better idea as to whether you are eligible.

How much is the maximum Right to Buy discount?

The maximum Right to Buy scheme discounts available are:

• £136,400 in London (or 70% of the property’s value, whichever is lower).
• £102,400 in rest of England (or 70% of the property’s value, whichever is lower).
• £24,000 in Northern Ireland (or 60%, whichever is lower)

Wales ended the Right to Buy in January 2019 to preserve the stock of social housing. The Right to Buy scheme closed for tenants of registered housing associations in Northern Ireland in 2022. But this does not affect tenants of the Northern Ireland Housing Executive.

How is the Right to Buy discount calculated?

The level of discount you’ll get on your Right to Buy council house is based on:

• How long you’ve been a tenant with a public sector landlord
• The type of property you’re buying (whether it’s a flat or a house)
• The value of your home

Living in a council house: If you’ve been a public sector tenant living in a council house in England for between 3 to 5 years you’ll get a 35% discount. For 6 years plus, add 1% per year up to 70% or the cash maximum – whichever is lower.

Living in a council flat: While if you’ve been a public sector tenant living in a council flat in England for between 3 to 5 years you’ll get a 50% discount.For 6 years plus, add 2% per year up to 70% or the cash maximum – whichever is lower.

You can use the Right to Buy calculator to work out your discount.

Want to buy your council house? Speak to our partners at fee-free brokers L&C. They’ll explain your Right to Buy mortgage options and search the market for the best mortgage for you.

Can I make a joint Right to Buy application?

Yes, you can make a joint application for Right to Buy with:

• Someone who shares your tenancy
• Your spouse or civil partner
• Up to 3 family members who’ve lived with you for the past 12 months. They don’t have to be on your tenancy agreement but it must be their main home

Can my son buy my council house for me?

If you’re asking ‘can my son or daughter buy my council house for me?’ or ‘can I buy my mum’s council house’, there is nothing in law that specifies how a Right to Buy purchase should be financed. So a family member (or someone else) could provide the funding for the purchase. However legal ownership of the property can only be in the names of the eligible tenant/s and other eligible applicants.

Buying a council house new rules

In June 2022 the then Prime Minister Boris Johnson announced the Right to Buy scheme would be extended to tenants in housing association properties. However while Mr Johnson said the plans would help 2.5 million tenants in housing association homes he also said the scheme would be ‘responsibly capped’ – although a figure was never specified. But no concrete details about the proposed scheme have been announced so we’ll wait to see whether or not it comes to fruition.

However, depending on your circumstances, you may already qualify to buy your housing association home through a ‘Preserved Right to Buy’. If not, you may be able to buy it through the Right to Acquire scheme. Read on for more on these.

Do you need a deposit to buy a council house?

Not always. Some mortgage lenders may need a deposit to buy your council home. The amount depends on your mortgage lender and house price. However, some lenders will let you use your Right to Buy discount as your deposit.

Getting a Right to Buy mortgage

To get a Right to Buy mortgage, you’ll be subject to the same mortgage affordability as any other mortgage applicant. Your income and expenditure will be assessed and you’ll be credit checked. If you’re getting a Right to Buy mortgage it’s advisable to get help from a fee-free mortgage broker. Not only will they shop around to find you the best mortgage deal but they’ll also match you to the lender that’s most likely to accept your application.

Does armed forces accommodation qualify for Right to Buy?

Any time spent in armed forces accommodation can count towards the three year qualifying period for Right to Buy as well as the qualifying period for the discount. Plus you can count this time if your spouse or civil partner was a member of the armed forces and you lived with them in this accommodation. However if you are currently living in armed forces accommodation you do not have the Right to Buy.

Should I buy with Right to Buy?

There are lots of reasons why you might want to buy using Right to Buy. As well as attractive discounts on offer, your home could be a valuable asset for you and your family and an investment for the future. Owning your own home could also give you more freedom to make the changes you want to your home.

But there are a few issues you will want to think about before buying your council home. These include:

1. Can you afford it?

There are risks to owning a home and it is important to get independent mortgage advice to help you decide if you can afford to buy. Some mortgage lenders may require a deposit whereas others may be satisfied with the equity in your home. Our buying guides are here to help you decide whether you can afford to buy and how and when should you get a mortgage.  If you are concerned that you have a poor credit rating, there are ways you can improve your credit rating before applying for a mortgage.

2. The Real Costs of Right to Buy

And there’s not just the cost of the mortgage to consider. If you own your own home and your boiler breaks down you’ll need to arrange it being repaired yourself. Plus if you’re buying a leasehold property there will be on-going maintenance costs to consider too. If your property is part of a block you may have to pay a contribution to any works the Council decides to do to shared or common areas.

Read our guides on the hidden costs of buying and on the difference between leasehold and freehold properties.

How does the Right to Buy scheme work

If you want to use the Right to Buy scheme here’s the process:

1. Apply for the Right to Buy scheme

• You can either complete the RTB1 application form online, or ask your landlord for a printed copy.
• Print it, sign it, and send it to your landlord – send registered or recorded delivery so you get a receipt. They will say yes or no within four weeks. Or within 8 weeks if they’ve been your landlord for less than 3 years.
• If your landlord agrees to sell, they’ll send you a right to buy offer. They must do this within 8 weeks of saying yes if you’re buying a freehold property, or 12 weeks if you’re buying a leasehold property.

2. Get your Right to Buy offer

If your application has been accepted your landlord will set out in writing:

• How much they think you should pay and how the figure was worked out
• Your Right to Buy discount and how it was calculated
• A description of the property and any land that is included
• Estimates of any service charges (if it is a flat or maisonette) for the next five years
• Any known problems with the property’s structure, eg subsidence

If you are happy with this you have 12 weeks to accept. If you disagree with anything your landlord has said write to them within three months and ask for an independent valuation.

3. Follow the process of buying a house.

After you accept the offer, you will need to arrange for a mortgage and to instruct a solicitor.  See our step-by-step guide to buying a home

How long does the Right to Buy process take?

Once you’ve accepted the offer, you’ll then need to go through the conveyancing process. Find out how long this can take in our guide How long does conveyancing take?

Right to Buy rules after purchase

So are there any Right to Buy rules after purchase? Yes.

If you sell your home within 10 years of buying it through Right to Buy, you must first offer it to either your old landlord or another social landlord in the area. If you do this your home should be sold at full market price. However you can sell it to anyone if your landlord doesn’t agree to buy it within 8 weeks.

You’ll have to pay back some or all of the discount if you sell within 5 years of buying through Right to Buy. The amount you’ll need to pay back depends on how quickly you sell. When you sell within the first year, you’ll have to pay back all of the discount. If you sell after the first year, the total amount you pay back reduces to:

• 80% of the discount in the second year
• 60% of the discount in the third year
• 40% of the discount in the fourth year
• 20% of the discount in the fifth year

Bear in mind the amount you pay back depends on the value of your home when you sell it. So, if you got a 20% discount, you’ll have to pay back 20% of the selling price.

Lastly you may be limited on who you can sell your home to if it’s in:

• An area of outstanding natural beauty; or
• A national park; or
• An area the government says is rural for Right to Buy

There could be restrictions like you’ll need to sell to a buyer who has lived or worked in the area for more than 3 years – and this could cause difficulties in getting a mortgage. However your landlord will inform you of this when you apply.

What if I live in an ex-council home?

If your home was owned by the council but they sold it to another landlord such as a housing association during the time you were living in it, you may have the Right to Buy. This is called ‘Preserved Right to Buy’.

Buying a house from a housing association

If you live in a housing association house and don’t qualify for Preserved Right to Buy, you may be able to buy your house through the Right to Acquire scheme.

The Right to Acquire scheme allows most housing association tenants to buy their house at a discount, although the maximum discount is much lower than with Right to Buy.

Right to Acquire scheme eligibility

You can apply to buy your housing association home via the Right to Acquire scheme if you’ve had a public sector landlord for 3 years or more.

Your property must also have been:

• Built or bought by a housing association after 31 March 1997 and funded through a social housing grant provided by the Housing Corporation or local council, OR
• Transferred from a local council to a housing association after 31 March 1997.

The home you want to buy must also be a self-contained property and your only or main home. In some cases you can’t use the Right to Acquire, such as if you’re being made bankrupt or a court has ordered you to leave your home.

Can I make a joint Right to Acquire application?

Yes, you can make a joint Right to Acquire application with:

• someone who shares your tenancy
• up to 3 family members who’ve lived with you for the past 12 months (even if they do not share your tenancy)

What Right to Acquire discount can I get?

You can get a discount of between £9,000 and £16,000 on the price of your property. The size of discount depends on where you live in the UK. Your landlord will tell you what discount you’ll get when you apply to buy your house. Although your discount may be reduced if you’ve used Right to Acquire or Right to Buy in the past.

Is Right to Buy the same as Rent to buy?

No. Rent to Buy is a government scheme designed to ease the transition from renting to buying a home by providing subsidised rent. You may also hear it referred to as Rent to Save, Rent to Own or Intermediate Rent.