Right to Buy Scheme

In this article, we look at the Right to Buy Scheme. This is useful reading for CII CF6 and R07 exam preparation.

This article is correct as at 28 February 2025.

The Right to Buy scheme allows eligible tenants to buy their home from the local council (or certain housing associations) at a price below market value. The level of discount depends on factors including the type of property, the length of time the tenant has lived in the property and where the property is located.

The scheme is designed to encourage home ownership and provides tenants with an opportunity to invest in their future.

Eligibility

To qualify for the scheme, an individual must meet the following criteria:

Currently be a council tenant or have remained a tenant after their home was transferred from a local authority to a housing association while maintaining a secure tenancy.
Have rented from the public sector (council or housing association) for at least three years, though this period does not have to be continuous.
Their property must be self-contained and serve as their main home.
They must have a secure tenancy.

Discount

The Right to Buy discount has been reduced as part of government efforts to slow the sale of council homes and protect the social housing stock. While the scheme still allows tenants to purchase their homes at a discount, the reduction aims to strike a balance between home ownership opportunities and the need to maintain affordable housing supply. This change was announced in the Autumn 2024 Budget update, with a commitment to reinvest proceeds from sales into the construction of new affordable homes.

For applications made before 21 November 2024:

The maximum discount was £136,400 for homes located in a London borough.
The maximum discount was £102,400 for properties outside London.

From 21 November 2024 onwards, discount limits vary from £16,000 to £38,000 depending on the region.

Where the tenant is buying a house, a 35% discount applies if the tenant has rented for three to five years. After five years, the discount increases by 1% per additional year of tenancy, up to a maximum of 70%, or the regional discount cap, whichever is lower.

Where the tenant is buying a flat, a 50% discount applies if the tenant has rented for three to five years. After five years, the discount increases by 2% per additional year of tenancy, up to a maximum of 70%, or the regional cap, whichever is lower.

Example

Kay, a council tenant in the North East, has rented for 10 years. She would receive a 40% discount on her property’s market value. However, if the calculated discount exceeds £22,000 (the maximum discount for the North East region), it would be capped at that amount.

Considerations Before Buying

Although the Right to Buy scheme offers a substantial discount, buying a home comes with long-term financial commitments. An individual considering Right to Buy must factor in:

Mortgage repayments, if borrowing is required.
Maintenance and repair costs, which were previously covered by the local authority.
Insurance expenses, including buildings insurance.

For flats, additional expenses such as service charges and ground rent may apply, potentially adding significant long-term costs.

For those who require a mortgage, some lenders offer Right to Buy mortgages, where the discount serves as a deposit.

Moving On

Selling a property purchased through Right to Buy within five years of ownership requires repayment of a portion of the discount:

Within the first year: 100% of the discount must be repaid.
Year 2: 80% repayment.
Year 3: 60% repayment.
Year 4: 40% repayment.
Year 5: 20% repayment.

After five years, the property can be sold without repaying the discount. However, if the property is sold within ten years, it must first be offered to the former landlord (council or housing association) or another social housing provider at market value.

Right to Buy Agent service

Support is available for those considering entering the right to buy scheme via the Right to Buy Agent service. This offers free advice on:

the Right to Buy process;
eligibility;
filling out an application form;
where financial and legal advice can be obtained; and
what to do if an application is delayed.

Grab the resources you need!

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How the Right to Buy Scheme Works: Eligibility, Discounts, and Key Considerations