Right To Buy Mortgages

Right to Buy Mortgage - An Introduction

The Right To Buy Scheme is considered by many to be one of the greatest opportunities open to council tenants to get on the property ladder. Despite this, the Right to Buy Scheme is little understood and it is this lack of understanding that prevents many tenants from exercising this right and getting their first foothold on the property ladder.

So far, nearly 1.6 million individuals have exercised their right to buy and this figure suggests that, although not widely understood, the right to buy scheme is gaining momentum across the UK.

Can Anyone Get A Right to Buy Mortgage
Right to buy schemes operate purely for council tenants who have been tenants in the council property for at least 2 years. Once the tenant has met the minimum length of time, which is currently set at 2 years in their council property for tenancies that began before 18 January 2005, they are able to purchase the property at a price that is lower than market value. If the tenancy began on or after 18 January 2005 (or after 12 October 2004 in Northern Ireland) then the minimum length of time is 5 years.

Almost any council tenant is entitled to exercise their right to buy, provided that they are in a suitably secure financial position in order to be able to obtain a mortgage. There are some potential exceptions which include those who have been housed in their property as a condition of their employment, or those allocated housing that has been provided especially for disabled or elderly residents.

In order to exercise the right to buy, the tenant must be renting their property from: a local authority, a housing action trust, a non-charitable housing association or, if they are in Northern Ireland, the Northern Ireland Housing Executive.

Further Benefits of Right to Buy for the Community
One of the sociological benefits of the right to buy scheme is that it encourages more affluent council tenants to stay in the area that they have lived in for some time, thus diversifying the residential mix and preventing a ghetto-style issue arising in certain council property areas. This right to buy scheme has resulted in much more stable and varied communities, which has a positive knock-on effect on all properties in the locality.

Summary
Right to buy allows council tenants to purchase their property;
a council tenant can purchase a property at a discount; and
the right to buy scheme rewards long-term council tenants and encourages them to stay in the area.