Changes to Right to Buy: November 2024

First Select Mortgage Brokers Right to Buy

Changes to Right to Buy: November 2024

The Right to Buy scheme has allowed council and housing association tenants (that qualify) the right to buy their home. The scheme was designed to turn a generation of renters into home owners, giving them some security and ownership of their property.

The scheme has been political, with Labour keen to reduce the scheme to allow more homes available for rent, with Conservatives keen for people to be able to own their own home and leave an inheritance.

When originally launched in 1980, the scheme offered a significant discount off the cost of buying your home. Different governments have come in and made changes to the scheme over the years. The biggest changes were between 2012 ~ 2014 when the discounts were increased to their current level.

Discounts since 2014:

The maximum discount on any property is capped at £96,000 across England, and £127,900 for properties in London. The amount of discount increases every year in line with the consumer price index (CPI).

HOUSES: You can get a 35% discount for tenants renting for 3 – 5 years. After 5 years, the discount increases by 1% for every additional year up to a maximum of 70% or the above mentioned discount cap.

FLATS: You get a 50% discount for tenants renting for 3 – 5 years. After 5 years, the discount increases by 2% for every additional year up to a maximum of 70% or the above mentioned discount cap.

The maximum discount from April 2024 is £136,400 in London, and £102,400 outside of London.

What is changing?

From 21st November 2024 the amount of discount you can get will reduce. You can still buy your home for a discount, but the discount is less. This means you will need a bigger mortgage and/or cash deposit to buy your home. A bigger mortgage will usually mean the monthly payments will be higher. You may also need to save for a deposit depending on the value of your home. Tenants in London where house prices are high, will almost certainly need to

Discounts from 21st November 2024:

The maximum discount you can get is the lower of:

70% of the value of the property
The maximum discount Cap for your area

Check below to see what region your home is located and the maximum discount Cap for your region. There are also some exceptions that increase or decrease the discount.

REGION	MAX. DISCOUNT	EXCEPTIONS
North East	£22,000	n/a
North West	£26,000	n/a
Yorkshire & Humber	£24,000	n/a
East Midlands	£24,000	n/a
West Midlands	£26,000	n/a
Eastern	£34,000	£16,000 in the district of Watford
South East	£38,000	£16,000 in the areas of Reading Borough and West Berkshire, Hart District, Oxford and Vale of the White Horse District, the boroughs of Tonbridge and Malling, Epsom and Ewell, and Reigate and Banstead
South West	£30,000	n/a
London	£16,000	£38,000 in the boroughs of Barking and Dagenham and Havering

Also worth noting that your discount can be reduced if your Landlord has incurred expenses in maintenance and upkeep of your property. This often impacts flats more than houses, due to communal areas, hall ways and lifts and fire systems that need to be maintained.

What do these changes mean?

In summary it will be harder to purchase your home using Right to Buy, but not impossible!

The changes will mean more people will not be able to purchase their home using the Right to Buy scheme. Because the discount is reduced, many people will need bigger mortgages, which may not be affordable. They may also need to put down a larger cash deposit to buy their home, and they may not have the savings to do so.

However, the discount is still reasonable and effectively free money off the cost of your home. The discount can be used as your deposit, so it reduces the amount you need to put in. Speak to our team of expert mortgage advisers who can advise on the best method to buy your council/housing association home.

Is my landlord the Council or Housing Association?

This can be confusing. Prior to the 1990’s almost all public sector housing was owned and managed by councils, hence the term ‘council house’. However in the 90’s and 2000’s many councils transferred the ownership of their housing stock to a dedicated business to manage all the houses, rents and be a professional landlord. If you were renting your council home before your landlord became a housing association, then your ‘Right to Buy’ will have transferred with you.

Sadly we have had clients advise us that the housing association has try dissuade and ‘put them off’ buying their home. This is not acceptable and you should raise a complaint. Housing association staff are not FCA regulated or qualified to discuss mortgage products.

Want to start the Right to Buy process?

Want to contact us about Right to Buy? Go to our dedicated page here to complete a short enquiry form.

About us

First Select Mortgage Brokers are friendly and professional mortgage brokers. We can access mortgages from the whole of the UK mortgage market, meaning we can get the best possible deal for our clients circumstances. Based in Manchester, we are a family business with decades of experience in financial services. Our goal is to be the most trusted regional mortgage advisory business in the northwest of England.