Right to Buy Discount Calculation: Full Guide (2026)
How the Right to Buy discount is actually calculated, the maximum caps, the repayment-if-you-sell-early rules, and worked examples for houses and flats.
How the Right to Buy discount actually works
Right to Buy allows eligible council (and some housing association) tenants in England to buy their home at a significant discount to market value, based on how long they have been a public sector tenant. The percentage discount rises with tenancy length, but is capped both as a percentage (maximum 70%) and in cash terms by a regional maximum discount cap, which is the figure that most often limits the actual saving on higher-value properties.
Discount percentage rules:
| Property type | Starting discount (after 3 years) | Annual increase | Maximum percentage |
|---|---|---|---|
| House | 35% | +1% per year | 70% |
| Flat | 50% | +2% per year | 70% |
Worked example 1: A house with 8 years' tenancy
Derek has been a council tenant for 8 years and wants to buy his house, valued at £180,000.
- Starting discount at 3 years: 35%
- Additional years beyond 3: 8 − 3 = 5 years × 1% = 5%
- Total discount: 35% + 5% = 40%
- Discount amount: 40% × £180,000 = £72,000
- Purchase price: £180,000 − £72,000 = £108,000
Provided £72,000 is below the regional maximum cash cap, Derek pays the full 40% discount. If the cap were, for example, £60,000, his discount would be limited to £60,000 (a 33.3% effective rate), and he would pay £120,000 instead.
Worked example 2: A flat with 15 years' tenancy
Aisha has been a tenant for 15 years and wants to buy her flat, valued at £220,000.
- Starting discount at 3 years: 50%
- Additional years beyond 3: 15 − 3 = 12 years × 2% = 24%
- Total percentage: 50% + 24% = 74%, but capped at the maximum of 70%
- Discount amount: 70% × £220,000 = £154,000
- Purchase price: £220,000 − £154,000 = £66,000
Aisha reaches the 70% percentage cap well before 15 years is up (mathematically, the flat percentage cap is reached at 3 + (70−50)/2 = 13 years), so any tenancy beyond 13 years brings no further percentage benefit, though the cash cap may still bind depending on the property's value.
Worked example 3: Selling within the discount repayment period
Marcus bought his former council house under Right to Buy 2 years ago with a discount of £45,000. He now needs to sell.
Under the standard sliding scale for discount repayment:
| Years owned before sale | Discount repayment required |
|---|---|
| Less than 1 year | 100% |
| 1 year but less than 2 | 80% |
| 2 years but less than 3 | 60% |
| 3 years but less than 4 | 40% |
| 4 years but less than 5 | 20% |
| 5 years or more | 0% |
Marcus, having owned for 2 years, must repay 60% of his £45,000 discount = £27,000 to his former landlord from the sale proceeds, in addition to potentially needing to first offer the property back under the right of first refusal if within 10 years of purchase.
Financing your Right to Buy purchase
Because your mortgage is based on the discounted price rather than full market value, your required deposit and monthly repayments are typically much lower than for an equivalent open-market purchase. Using the earlier example, Derek needs a mortgage for £108,000 rather than £180,000 — a substantial reduction in monthly repayments and the deposit needed on top.
Use a Mortgage Calculator to see what your monthly repayment would look like on the discounted purchase price at current rates, and a Mortgage Affordability Calculator to check how much you could realistically borrow based on your income before committing to the purchase.
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Open Mortgage Affordability calculatorComparing discount outcomes by tenancy length (house)
| Years as tenant | Discount % | Discount on a £200,000 house | Price payable |
|---|---|---|---|
| 3 years | 35% | £70,000 | £130,000 |
| 8 years | 40% | £80,000 | £120,000 |
| 15 years | 47% | £94,000 | £106,000 |
| 38+ years | 70% (max) | £140,000 | £60,000 |
Practical steps before applying
- Confirm your qualifying tenancy years with your landlord, including any prior public sector tenancies that count.
- Get an independent valuation — your landlord will arrange a formal valuation, but you can challenge it if you believe it is too high.
- Check the current regional maximum cash discount cap on gov.uk before assuming the full percentage discount will apply.
- Speak to a mortgage broker about Right to Buy mortgage products, since not every lender offers them on the same terms as standard residential mortgages.
- Understand the 5-year discount repayment taper before deciding whether you might need to sell in the near future.
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