Need a helping hand to look for the best 'Right to Buy' mortgage, we work for you to find the most cost effective mortgage to achieve your objectives.
A revamped Right to Buy (RTB) scheme now offers a discount of up to £77,900 off the cost of buying your council home.
To be elegible for the RTB discount scheme you will need to have been a public sector tenant for at least 3 years, this means your landlord would have to be a Council, NHS Trust or Housing Association. You can apply to buy if:
You cannot apply for RTB if you are an 'undischarged Bankrupt' or you are presently being declared bankrupt.
The maximum discount in England (except London) is £77,900 and this will increase in line with the consumer price index in April. The discount is based on:
There are different discount levels for houses and flats.
Houses - You get a 35% discount if you have been a tenant for between 3 and 5 years. After 5 years, the discount goes up by 1% for every extra year you have been a public sector tenant, up to a maximum of 70%, or £77,900 whichever is lower.
Flats - You get a 50% discount if you have been a tenant for between 3 and 5 years. After 5 years, the discount goes up by 2% for every extra year you have been a public sector tenant, up to a maximum of 70%, or £77,900 whichever is lower.
Your discount could be less if your landlord has spent money building or maintaining your home in the last 10 years.
To start the process of applying to buy, download and complete the RTB1 here, and send it to your landlord.
If your landlord agrees to sell, their offer will inform you of the price they think you should pay for the property, and how it is worked out. It will also explain your discount, and how it was worked out, a description of the property, and any known problems with the structure of the property.
You have 12 weeks from when you get the landlords offer to tell them you still want to buy!
For mortgage purposes, many lenders will let you use your 'Right to Buy' discount as your deposit, this means you will not have to save a deposit yourself. However, some lenders may still expect you to put down a deposit as well as the discount.
Selling you home
If you sell your home within 10 years of buying through Right to Buy, you must first offer it to:
The property should be sold at the full market value, agreed between you and the landlord.
You can sell your home on the market to anyone if the landlord does not agree to buy the property within 8 weeks.
If the property is sold within 5 years of purchase, you may have to repay some or all of the discount. The amount repayable depends on how long you have owned the property when you sell. You will repay all the discount if you sell within the first year. After this, the amounts reduce to:
The amount you pay back also depends on the value of your home when you sell it, whether it has increased or decreased in value. As an example, lets say when you bought your home it is worth £100,000, and you got a discount of £40,000 (40%), then sell the property after 30 months for £110,000 (£110,000 x 40% =£44,000). The discount would be calculated at £44,000 so you will payback 60% of £44,000.
The advice you receive on mortgages from North East Mortgage Brokers is unbiased and free, and at no point will we charge you for our mortgage services. We are paid a commission from the lender.
You can choose how we are paid for mortgages. We can accept commission from the lender in which no fee would be payable. However if you want to pay for our services by paying a fee, then a charge of 0.5% of the loan will apply.