RIGHT TO BUY MORTGAGES

The UK Government introduced the “Right to Buy” scheme in the 1980s. This scheme enables public sector tenants (both council and housing associations) to purchase their homes at a reduced rate. Since then, this scheme has helped numerous tenants in becoming homeowners. However, acquiring a right to buy mortgage can be a complex process. This type of mortgage is specifically tailored for those who wish to buy their council property, and several lenders offer it.

It is crucial to shop around for the best deal and provide proof of income and demonstrate affordability along with supporting details of the intended property to be purchased. One of the benefits of the Right to Buy scheme is that tenants can utilise the discount they receive on their property to act in lieu of a deposit.

To be eligible for the Right to Buy scheme in the UK, you must have been a council tenant for at least three years, although this does not have to be continuous. You must also occupy the property as your main residence and have no legal issues, such as outstanding debts or possession orders. Additionally, some properties, such as those adapted for disabled tenants, may not be eligible for purchase under the Right to Buy scheme.

The maximum discount is typically revised each April, broadly in line with inflation. For full details of the current discount levels, visit the official UK government advice page, by clicking here (https://www.gov.uk/right-to-buy-buying-your-council-home/discounts).

It is possible to use the discount you obtain from the Right to Buy scheme as a contribution towards your mortgage deposit, which is beneficial in reducing the amount you need to save. However, it is important to remember that the discount may not cover the entire deposit amount, and you may still need to provide some of your own funds. Additionally, eligibility criteria from mortgage lenders must be met, and you will need to demonstrate proof of income and affordability to obtain a mortgage.

It may be more challenging to obtain a right to buy mortgage if you have bad credit, as lenders typically assess your credit history and financial situation before approving a mortgage application. Bad credit could be a red flag for lenders, as it indicates a higher risk of defaulting on mortgage repayments.

We find, it is possible to get a Right to Buy mortgage with bad credit, and some lenders specialise in providing mortgages to borrowers with less-than-perfect credit histories.

If you have bad credit, it is essential to work on improving your credit score before applying for a mortgage. You can do this by paying off any outstanding debts, making all your payments on time, and correcting any errors on your credit report.

It is possible to apply for the Right to Buy scheme with another person in the UK, such as a partner, family member, or friend. By doing so, both applicants can combine their discounts and income to improve their chances of obtaining a mortgage and reducing the amount they need to borrow.

It is important though to remember that both applicants must meet the eligibility criteria of the Right to Buy scheme and the lender's requirements. Additionally, joint applicants should have a clearly defined agreement outlining their respective property shares, mortgage payment responsibilities, and other related expenses.

No. If you are already a homeowner, you are not eligible to purchase a property through the Right to Buy scheme. The scheme is exclusively available to council and housing association tenants who have lived in their property as their primary residence for at least three years.

However, if you are a homeowner, you may still be able to apply for other types of mortgages, such as a standard residential mortgage, to purchase another property. Why not speak to us here at ams: to see which mortgages (including buying council house mortgages) would be most appropriate for your circumstances?

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