What is Right to Buy?

The Right to Buy scheme was originally introduced in the UK in 1980 and still applies to tenants in England. Under the scheme council tenants and some housing association tenants can buy their home at a discount of a maximum of 70% off the purchase price, up to a total of £108,000 discount in London and £80,900 elsewhere. Joint applications are allowed, so your clients have the option of buying with a partner or someone who shares the tenancy

Who is this product for?

  • For those customers who are currently renting a local authority or housing association property who are looking to make it their permanent home
  • Using the Governments Right to Buy scheme makes properties available at a discounted purchase price to help tenants buy their property.
  • Visit https://righttobuy.gov.uk/ to find out if your client is eligible for the Right to Buy scheme for more information on eligibility.

Key Lending Criteria

  • Acceptable for schemes operated by recognised local authorities / housing associations up to 100% Discounted Purchase Price
  • Subject to the loan not exceeding 75% of the Open Market Value.
  • A copy of the Section 125 Right to Buy is required, giving details of the property valuation and the discount offered.
  • All persons named on the Section 125 will also need to be on the application
  • Houses are considered up to scheme and LTV limits if:
    • There is no outstanding pre-emption requirement to repay a proportion of the discount
    • The property is of suitable security and standard construction, and additionally a Wimpey No Fines house (provided it was constructed post 1945 and is not a bungalow) or Laing Easiform house (provided it was constructed post 1965 and is not a bungalow).
  • Flats/Maisonettes are considered up to 80% LTV if:
    • Minimum property value of £80,000 (£200,000 in Greater London) – the open market value not the discounted value
    • Where the block is over 4 storeys in height (ground floor + 3 floors) or with more than 50 units, considered on an individual basis. Balcony access can be accepted.
    • No requirement for a lift if the flat is on one of the first three floors above ground, irrespective of the number of floors in the block