Compare Right To Buy Mortgages

Will lenders use my discount as my deposit? Yes, we have some mortgage lenders that will use 100% of the discounted price as a deposit. For example, if a property is valued at £100,000 but has a discounted purchase price of £60,000, the lender will use the £100,000 figure as the property valuation and consider the £40,000 as the deposit.

What property types will be accepted? Our lenders will consider most property types. Often, council properties are built with non-standard construction types, such as PRC (Precast Reinforced Concrete). We will only have issues if the property or construction type has known structural issues. However, if the relevant repairs have been carried out by the local authority, and we can provide a certificate to confirm the necessary repairs have been completed, several lenders will be happy with this.

What income can be used? The income types used on a Right to Buy mortgage application are the same as a standard mortgage. Depending on the lender, what income can be used varies, but we can use most employed and self-employed incomes, as well as other income sources such as Universal Credit, Child Tax/Working Tax Credit, Personal Independence Payment (PIP), and Carers Allowance.

Who can be on my Right to Buy mortgage application? Only individuals named on the Section 125 (offer to purchase) from your local authority can be named on the application. Currently, up to 3 family members can apply to purchase, and all members must have lived at the property for the past 12 months.

What if I have bad credit? Can I apply for a Right to Buy mortgage? Yes, you can, but it will depend on how recent the issues were and how severe they are. Some lenders will consider applicants who have had defaults or CCJs registered in the last 12 months, provided we can provide a clear explanation as to why they occurred. However, if you have recently been made bankrupt, we may be unable to help, as it is unlikely the council will grant you permission to purchase the property in this case.

Parent/Child Right to Buy Mortgage Application: We often see applications from a parent and child. Most mortgage lenders are happy to offer Parent/Child Mortgages; however, the lenders will work off the oldest applicant’s age. For example, if one applicant is age 70 and the other is age 45, it’s unlikely that we can arrange a 25-year term mortgage. Most mortgage lenders will have a maximum age of 85 if using pension income and 70-75 if using an employed income source.

Interest-only Right to Buy Mortgage: Yes, we can look to offer an interest-only Right to Buy mortgage if we have a suitable exit plan in place to redeem the mortgage. For example, if your council home was valued at £400,000 and you purchased it for £250,000, and you plan to downsize or relocate to a different region of the UK (or outside the UK) where the £150,000 equity could purchase a home, this should be viable. However, if your property was valued at £100,000 and you were purchasing it for £75,000, it would be difficult to obtain an interest-only mortgage.

 If you want to discuss your mortgage in more detail, please call us at 01656 766158.

Updated 17/10/2023 – CH