Owning your own home is a dream for many, giving you a sense of stability and investment. However, 40% of young people in England can’t afford to buy even the cheapest home in their area – even if they have a 10% deposit.
For council tenants in the United Kingdom, the Right to Buy scheme has been a significant policy turning that dream into reality for over four decades.
In this blog post, we will discuss the main aspects of the Right to Buy scheme, exploring its key features, benefits, and criticisms, to provide a comprehensive understanding of how it works and its implications for both tenants and the broader housing market.
What is the Right to Buy Scheme?
The Right to Buy Scheme is a government programme that allows tenants of a council home to outright purchase their property at a greatly reduced price. This was a great introduction to the law that has helped many people over the years with buying their own homes and not being stuck in a cycle of renting.
The Right to Buy Scheme was brought into effect in 1980 and has been a positive change for both the economy and homeowners across the country. But how does this scheme work? How exactly can you get involved with it?
How Does the Right to Buy Scheme Work?
The Right to Buy Scheme, as stated previously, is a way for people living in council houses to purchase the home they are living in for a reduced price than market value, so how does this work?
You will first need to check if you are eligible to apply for the scheme, which will then give you access to the great discount. However, there are some caveats to this…
For example, if you wish to sell your property within 5 years of buying, then you will need to pay back either some or all of the discount that you had.
If you choose to sell your property in the first year, you will need to pay back 100% of the discount, the second year will be 80%, the third year you will need to pay 60% etc. Alongside this, the level of discount will depend on how long you have lived in your current property before trying to buy it.
As of July 2015, the maximum discount for a property in London was £103,900 and £77,900 for the rest of the country. However, this figure has changed over the years showing the growth of these discounts over time.
As of April 2024, you will be eligible for £136,400 discounts in London Boroughs and £102,400 for the rest of the UK. This increase can only rise alongside inflation in the UK and has been of great benefit to many people across the country.
How Do I Know if I Am Eligible?
There is a set number of eligibility criteria that you must fall under before you can apply for the Right to Buy Scheme, these include:
- Tenancy status: You must be a secure tenant in the property you wish to buy.
- Length of tenancy: You must have spent at least three years as a public sector tenant. This doesn’t have to be continuous or in the same property.
- Property type: The property must be your only or main home.
- Legal status: You must not have breached any suspended possession order.
- Property condition: Your home must not be due for demolition (you would have been served a notice if this were the case).
- Landlord type: You must be renting from a public sector landlord, such as a local council, housing association, or other government department.
- Joint applications: If you’re applying jointly, you can do so with someone who shares your tenancy or with up to three family members who have lived with you for the past 12 months.
- Property location: The scheme is available in England and, to a lesser extent, Northern Ireland. It is no longer available in Scotland (since August 2016) or Wales (since January 2019).
Why Was the Right to Buy Scheme Introduced?
As we stated earlier, the Right to Buy Scheme was introduced in 1980 to give people the power of independence in their homes.
| Reason | Explanation |
|---|---|
| To promote home ownership | The scheme aimed to give long-term council tenants the opportunity to become homeowners, which was seen as a way to increase social mobility and personal wealth. |
| Political ideology | It aligned with the government’s ideology of promoting a “property-owning democracy” and reducing the role of the state in housing provision. |
| Reducing public housing stock | The government wanted to decrease the amount of social housing managed by local authorities, believing that private ownership would lead to better maintenance and community investment. |
| Generating revenue | The sales of council houses provided a source of income for local authorities and the central government. |
| Addressing housing maintenance issues | Many council estates were in poor condition, and the government believed private ownership would lead to better upkeep of properties. |
| Electoral strategy | The policy was popular among many working-class voters, helping to broaden the Conservative Party’s appeal. |
How Can We Help You?
If you need assistance with securing your mortgage, whether this be through the Right to Buy Scheme or not, the team here at JG Mortgage Services Limited are here to help!
While the Right to Buy Scheme does not offer mortgages directly, you can utilise the help of trusted mortgage lenders to make the discounted purchase of your home through the scheme.
We have a team of specialised mortgage advisors who will be able to help you throughout every step of the mortgage process, providing you with sound advice for a reasonable price to make sure you get the best out of this deal.
We are also able to assist people who are not eligible for the scheme with anything from buy-to-let mortgages to first-time buyer mortgages. We understand that this process can be daunting, which is why we go above and beyond to make this easier for you.
Key Takeaways
- Eligible council tenants can buy their homes at a discount. The discount must be repaid if the property is sold within five years. Discount amounts vary by location and increase with inflation.
- To qualify, tenants must be secure, have at least three years of public sector tenancy, use the property as their main home, not be under a suspended possession order, and the property must not be slated for demolition.
- The scheme was introduced to promote home ownership, reduce public housing stock, generate revenue and improve housing maintenance.
- JG Mortage Services Limited offers assistance with securing first-time mortgages for those participating in the Right to Buy scheme and other mortgage needs, providing specialised advice and support throughout the process.
Joshua Griffith is the founder of JG Mortgage Services Ltd, established in 2021. With over a decade of experience in UK banking, he brings a client-focused approach to mortgages. Passionate about helping families achieve homeownership, Joshua combines industry expertise with personalised support.
