The Right To Buy council scheme enables Local Authority tenants with a minimum of 2 years tenancy the right to buy their current council flat or house at a discounted market price. The scheme is targeted at long term council tenants, with the Right To Buy discount increasing in proportion to the years that rent has been paid to the local authority.
Not all mortgage lenders will accept Right to buy mortgages but those that will can often lend up to 100% of the discounted purchase price and in some cases more for specific purposes inc refurbishment of bathroom and kitchens.
When calculating your loan to value the lender will work on the open market valuation. For example if the open market value is £200,000 and the discounted purchase price is £100,000 and you are looking to borrow £100,000 then the loan to value is 55%, which means more favourable products are available as the LTV is very low.
On this basis the property can be purchased with no deposit from yourself. If you do not meet the lenders which factor in all the discount as your deposit a small deposit of 5-10% maybe required.
Over the years the discounts have increased to £100,000 max so it’s a great opportunity for council tenants to purchases their homes with built in equity.
Contact us now to discuss your application or answer any questions you may have.