Eligibility For Right To Buy mortgages

Although most of us in the UK own our own home, many of us are in rented accommodation. Of those renting a large percentage do so from their local authority in what is traditionally called ‘council housing’.

From the early 1980’s many renters in council provided accommodation have been able to buy their property at a discounted rate from the local authority. This includes flats and houses. This type of arrangement is not applicable to people who have bought their own house or rent a property privately.

In simple terms, a Right to Buy mortgage is a scheme that enables secure tenants of council accommodation to purchase their home at an economical price. Right to Buy mortgages apply to those who have been tenants of local authority housing for a certain amount of time. The scheme is aimed at long standing public tenants.

The longer you have been in the house, the higher the discount is likely to be. But it is limited to the maximum amount available in the area and, if you move out within five years of buying, you might have to repay the discount.

If you moved in before January 18th 2005, you have to have lived there for two years to be eligible. Those who began their tenancy after that date have to have five years under their belt.

People who are not eligible include those who are going through bankruptcy proceedings or tenants whose home is rented conditionally due to their employment.

The property will be valued by an impartial company which gives the Open Market Value (OMV). From this will be calculated the discounted price (RTB Price).
Not all lenders will provide a Right to Buy mortgage so it is worth looking around for one that does.

The first step to investigating whether a Right to Buy scheme is suitable could be to contact your landlord. Remember, a home is one of the biggest things you may ever purchase, and it may be worth talking to an independent financial adviser to make sure you get the best deal for your individual circumstances.

If you would like to know more about mortgages why not ask AnswerBank Business and Finance.