Glossary · UK
What is Right to Buy Discount?
The reduction from market value given to eligible council tenants buying their home under the Right to Buy scheme, capped at a maximum amount and subject to repayment if the property is sold within five years.
Full Definition
Right to Buy allows eligible secure council tenants (and some housing association tenants under the related Preserved Right to Buy or Right to Acquire schemes) who have been a public sector tenant for at least three years to buy their home at a discount to its market value, with the discount percentage increasing with each additional year of qualifying tenancy up to a maximum -- typically starting once the three-year qualifying period is met, and rising with further years of tenancy up to a capped maximum discount (a specific percentage for houses and a somewhat higher percentage for flats, reflecting flats' typically higher service charge and leasehold complexity), subject to an overall cash cap that is reviewed periodically and can vary between regions. The discount is a reduction from the property's independently assessed market value at the time of purchase, and there is a repayment (clawback) obligation if the property is sold within five years of the Right to Buy purchase: the discount must be repaid to the council in full if sold within the first year, reducing on a sliding scale for each additional year up to year five, after which no clawback applies. A separate restriction requires the property not to be let out (rather than lived in by the buyer or their family) for a period after purchase in some cases, to discourage the scheme being used purely as an investment vehicle to acquire a discounted buy-to-let property. Right to Buy has been the subject of ongoing policy debate and reform, including reductions to the maximum discount cap and changes to qualifying criteria announced in recent years aimed at reducing the loss of social housing stock, since each Right to Buy sale permanently removes a property from the local social housing pool unless the council chooses and is able to replace it with a new build funded partly by the sale receipts. Wales abolished Right to Buy entirely in January 2019, and Scotland abolished it in August 2016, meaning the scheme (in its traditional form) is now available only to qualifying tenants in England, with tenants elsewhere in the UK needing to check the specific position for their nation.