Right to Buy Mortgages: Comprehensive Guide 2025

The Right to Buy scheme gives council tenants in England the legal right to purchase the property they rent at a significant discount. For eligible tenants, this is one of the most affordable routes to homeownership, with discounts of up to £96,000 (or £127,900 in London) depending on the type of property and length of tenancy.

In this comprehensive guide, we explain everything you need to know about Right to Buy in 2025 — from eligibility and discount calculations to securing a mortgage and the step-by-step application process.

What is the Right to Buy?

The Right to Buy is a government scheme, originally introduced in 1980, that allows eligible council tenants to purchase their rented home at a price below its market value. The discount is the government’s way of recognising the investment tenants have made through years of rent payments and allowing them to build wealth through property ownership. This represents one of the most accessible routes onto the property ladder for many UK households.

The scheme applies to council (local authority) tenants in England. Scotland, Wales, and Northern Ireland have either ended or significantly reformed their own versions of the scheme. If you are a housing association tenant rather than a council tenant, you may instead be eligible for the Right to Acquire or the Preserved Right to Buy.

The key features of Right to Buy are:

• A substantial discount on the market value of your home
• The ability to use the discount as your mortgage deposit — often meaning you need little or no personal savings
• Access to standard residential mortgage products at competitive rates
• The right to become a full homeowner with all the benefits that brings, including the ability to make improvements, pass the property on to family, or sell it (subject to certain restrictions in the early years)

Who is eligible for Right to Buy?

To qualify for Right to Buy, you must meet specific criteria:

You must be a council tenant — your landlord must be a local authority (council). If your home was transferred from the council to a housing association, you may have the Preserved Right to Buy instead.

You must have been a public sector tenant for at least three years — this includes time spent as a council tenant, housing association tenant, or tenant of another public sector body. The three years do not have to be continuous and do not have to be in the same property.

The property must be your only or main home — you must be living in the property as your primary residence.

You must not be subject to a possession order — if the council has obtained a court order to repossess your home (for example, due to rent arrears or anti-social behaviour), you cannot exercise the Right to Buy until the order is resolved.

You must not be an undischarged bankrupt — if you are currently bankrupt, you cannot apply until your bankruptcy is discharged.

Joint applications — you can make a joint application with your spouse, civil partner, or up to three family members who have lived with you for at least 12 months. Joint applications can be helpful for affordability, as multiple incomes can be used for the mortgage assessment.

How much discount can you get?

The Right to Buy discount is one of the scheme’s most attractive features. The amount you receive depends on the type of property, the length of your tenancy, and regional caps.

For houses:

• You receive a 35% discount after three years of tenancy
• The discount increases by 1% for each additional year of tenancy, up to a maximum of 70% of the property’s market value

For flats:

• You receive a 50% discount after three years of tenancy
• The discount increases by 2% for each additional year of tenancy, up to a maximum of 70% of the property’s market value

Maximum discount caps (2025):

• £96,000 in England (outside London)
• £127,900 in London

These caps are updated annually in line with the Consumer Price Index (CPI).

Example calculations:

Property type	Market value	Tenancy years	Discount %	Discount £	Cap applies?	Purchase price
House	£150,000	5 years	37%	£55,500	No	£94,500
House	£200,000	10 years	42%	£84,000	No	£116,000
House	£250,000	20 years	52%	£130,000	Yes (£96,000)	£154,000
Flat	£120,000	5 years	54%	£64,800	No	£55,200
Flat	£180,000	10 years	64%	£115,200	Yes (£96,000)	£84,000

The discount effectively becomes equity in your property from day one. If you have a 40% discount, you already own 40% of the property outright before your mortgage even begins.

How to get a mortgage for a Right to Buy purchase

Securing a mortgage for a Right to Buy purchase is generally straightforward, as lenders view the discount as built-in equity that significantly reduces their risk. Here is what you need to know.

The discount as your deposit:

Most lenders will treat the Right to Buy discount as your deposit. For example, if you are buying a house worth £150,000 with a 37% discount (purchase price £94,500), the lender sees that you already have £55,500 of equity in the property. You would need a mortgage of £94,500, which represents a 63% LTV — putting you in a very favourable bracket for interest rates.

In many cases, you will not need any additional personal deposit. However, having some savings can be helpful for covering purchase costs such as solicitor fees, surveys, and moving expenses.

Affordability assessment:

Even with a substantial discount, the lender will still assess whether you can afford the monthly mortgage payments. They will look at:

• Your income (salary, benefits, pension, or other sources)
• Your existing debts and financial commitments
• Your credit history
• Your monthly living expenses

Use our affordability calculator to get an initial estimate of how much you could borrow, and our mortgage calculator to estimate your monthly payments.

Credit history:

A good credit history will give you the widest choice of lenders and the best rates. However, if you have had credit problems in the past — such as missed payments, defaults, or CCJs — you are not necessarily excluded. Some lenders specialise in adverse credit and will consider Right to Buy applications from borrowers with imperfect histories.

Choosing the right mortgage product:

Right to Buy mortgages are standard residential mortgages, so you have access to the full range of product types:

• Fixed-rate mortgages — your payments stay the same for a set period (usually two, three, or five years), providing certainty and stability
• Variable-rate mortgages — tracker or discounted rates that may start lower but can change over time
• Repayment mortgages — you pay off the capital and interest together, owning the property outright at the end of the term
• Interest-only mortgages — you pay only the interest each month, with the capital repaid at the end. These are less common for residential properties but may be available in certain circumstances

Use our repayment calculator to compare the costs of different mortgage types and terms, or try our interest-only vs repayment calculator to see how different payment structures affect your finances.

The Right to Buy application process

The Right to Buy process is well-established and follows a clear set of steps.

Step 1: Check your eligibility

Before starting, confirm that you meet the eligibility criteria outlined above. Your council can also confirm your eligibility and provide details of any local rules that may apply.

Step 2: Submit an RTB1 application form

Complete the official Right to Buy application form (RTB1) and submit it to your council. You can download this form from the government’s website or request it from your council. If you are making a joint application with family members, they should be named on the form.

Step 3: Receive the council’s response

Your council must respond within four weeks for houses or eight weeks for flats (flats take longer because the council may need to establish information about the building structure and service charges). They will either accept your right to buy, give a reason for refusing it, or request more information.

Step 4: Receive the Section 125 offer notice

If your application is accepted, the council will send you a Section 125 notice within eight weeks (houses) or twelve weeks (flats). This sets out:

• The market value of the property (as assessed by an independent valuer)
• The discount you are entitled to
• The purchase price (market value minus discount)
• A description of the property, including any known structural defects
• Terms and conditions of the sale
• Estimated service charges (for flats)

If you disagree with the valuation, you have the right to request a reassessment by the District Valuer, an independent government official.

Step 5: Get a mortgage agreement in principle

With the purchase price confirmed, contact a mortgage broker to secure an agreement in principle. At Option Finance, we can quickly identify the best mortgage products available for your Right to Buy purchase.

Step 6: Instruct a solicitor

You will need a solicitor or conveyancer to handle the legal aspects of the purchase. They will review the offer notice, carry out searches, and manage the exchange of contracts and completion.

Step 7: Arrange a survey

A property survey is not required by the lender for the mortgage to proceed, but it is strongly recommended. A survey can reveal structural issues, damp, or other problems that could be costly to repair. For older council properties in particular, a full building survey can be a wise investment.

Step 8: Accept the offer and complete

Once you are satisfied with the valuation and your mortgage is approved, you accept the offer. Your solicitor will exchange contracts and arrange a completion date. On completion, you become the legal owner of the property.

The whole process typically takes two to six months, depending on the council’s processing times and any complications that arise.

What happens after you buy?

Once you have completed your Right to Buy purchase, there are several things to be aware of.

Discount repayment rules:

If you sell the property within five years of purchasing it, you will need to repay some or all of the discount:

• Year 1: repay 100% of the discount
• Year 2: repay 80%
• Year 3: repay 60%
• Year 4: repay 40%
• Year 5: repay 20%
• After 5 years: no repayment required

This means if you received a £80,000 discount and sell in year three, you would need to repay £48,000 (60% of £80,000) from the sale proceeds.

Right of first refusal:

Before selling your property on the open market within the first ten years, you must first offer it back to your former landlord (the council) or another social housing provider. They have the right to purchase it at the current market value.

Maintenance responsibilities:

As a homeowner, you are responsible for all maintenance and repairs. This includes structural repairs, boiler servicing, roof work, and anything else the council previously covered as your landlord. Make sure you budget for ongoing maintenance costs.

Leasehold considerations for flats:

If you purchase a flat, you will typically hold a leasehold rather than freehold interest. This means you may be liable for service charges, ground rent, and a share of building maintenance costs. These should be detailed in your Section 125 offer notice.

Stamp duty for Right to Buy purchases

If you are a first-time buyer, you benefit from stamp duty relief on your Right to Buy purchase:

• 0% on the first £300,000
• 5% on the portion between £300,000 and £500,000

Since most Right to Buy purchases are well under £300,000, the vast majority of first-time buyers using the scheme will pay no stamp duty at all.

If you already own another property (or are buying jointly with someone who does), the standard stamp duty rates apply, and the additional property surcharge of 5% may be triggered. Use our stamp duty calculator to check your specific liability.

Get expert Right to Buy mortgage advice

The Right to Buy scheme offers an incredible opportunity for council tenants to become homeowners at a significant discount. Having the right mortgage advice ensures you take full advantage of the scheme and secure the most competitive deal.

At Option Finance, our experienced advisers regularly help Right to Buy applicants find the best mortgage products for their circumstances. Whether you have a perfect credit history or have experienced difficulties in the past, we can find a lender to suit your needs. Learn more about our service on our how it works page.

We also help Right to Buy homeowners who need to remortgage when their initial deal ends, or who want to move home and need to navigate the discount repayment rules. For detailed remortgaging guidance, see our ultimate UK remortgage guide.

Apply now to speak with one of our mortgage specialists and take the first step towards owning your council home.