Answers · UK 2025/26

What is a Right to Buy mortgage?

A Right to Buy mortgage is a standard residential mortgage used specifically to purchase a council or housing association home under the Right to Buy scheme, which allows eligible long-term social housing tenants to buy their home at a discount to market value. Lenders assess the mortgage based on the discounted purchase price, and most will lend based on the standard purchase price minus the Right to Buy discount, though some restrict how the discount itself can be used.

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Right to Buy mortgages are not a distinct mortgage product type in themselves, but rather standard residential mortgages arranged specifically to complete a Right to Buy purchase, with some particular considerations that apply to this route into homeownership. **How the Right to Buy discount works** Eligible council tenants (and, under a related scheme, housing association tenants) who have lived in their social housing home for a qualifying period can buy it at a discount to its market value, with the discount increasing the longer they have been a tenant, up to a maximum percentage and cash cap that varies depending on location and property type. **How mortgage lenders treat the discount** Most mortgage lenders will base their lending on the discounted purchase price -- effectively treating the discount similarly to a deposit, meaning a buyer may need to borrow only against the discounted price rather than the full market value, which can make a mortgage more accessible than it would otherwise be for the same buyer purchasing a similar property on the open market. **Restrictions on using the discount as a deposit** Some lenders have specific rules about how much of the discount can be treated as equivalent to a cash deposit, and there may be a minimum cash deposit required in addition to the discount -- criteria vary between lenders, so it is worth shopping around or using a broker experienced with Right to Buy purchases. **The discount repayment clawback** If you sell the property within five years of completing a Right to Buy purchase, you may have to repay some or all of the discount received, on a sliding scale that reduces the longer you have owned the property -- this needs to be factored into your plans if there is any possibility of an early sale, since it directly affects how much equity you would actually retain from a quick resale. **Right of first refusal (pre-emption) for the landlord** For a period after completing a Right to Buy purchase (commonly the first 10 to 21 years, depending on when the purchase completed and the specific scheme rules), you may be required to offer the property back to the local authority or housing association first if you want to sell, before selling on the open market -- always check the specific terms that applied to your purchase. **Worked example** A long-term council tenant is eligible for a 50% Right to Buy discount on a home valued at £220,000, reducing the purchase price to £110,000. They arrange a mortgage based on the discounted £110,000 price, needing a smaller mortgage (and potentially a smaller cash deposit on top) than if they were buying an equivalent property on the open market. **Practical tip** Use the Mortgage Affordability calculator based on the discounted purchase price, and speak to a mortgage broker experienced with Right to Buy purchases, since not every lender offers Right to Buy mortgages or treats the discount in the same way.