Right to Buy mortgages: what lenders look at when you buy your council home

Eligibility is decided by your landlord, not the lender

Whether you can buy, and how much discount you get, depends on how long you have been a public sector tenant, the type of home and the rules in force on the day you apply. The discounts in England were cut sharply in November 2024 and the government has consulted on further changes, so check the current position with your landlord rather than relying on a figure you read a year ago.

Once your landlord has accepted your application it will send you an offer showing the price and the discount. That offer is what a lender works from, and it is the point at which it is worth talking to us.

Tenants of Cross Keys Homes

Peterborough City Council transferred its homes to Cross Keys Homes, so most people in the city renting what they think of as a council house are tenants of a housing association. Tenants who moved across at the transfer may have kept a preserved Right to Buy. Tenants who arrived later may instead have the Right to Acquire, which has smaller discounts and applies to fewer homes.

Which of the two you have makes a real difference to the price, so it is the first thing to confirm with Cross Keys. From the lender's point of view the mortgage works the same way either way.

How lenders treat the discount

Many lenders will count the discount as your deposit, so you may not need savings to put down. Most will lend against the discounted price rather than the full market value, and some will lend all of it, which means borrowing the whole discounted price with no cash deposit at all.

What they will not do is ignore affordability. You still need the income to support the loan, assessed the same way as anybody else's, and the lender will stress the payment against a higher rate than the one you are offered.

The properties some lenders will not touch

Plenty of homes built by councils after the war used non-standard construction: precast concrete panels, steel frames or other system-built methods. Some types are designated defective and a number of lenders will not lend on them at all unless they have been repaired to an approved standard.

Flats bring their own questions: the height of the block, cladding, and the service charges and major works bills you take on as a leaseholder. None of these rule a purchase out automatically, but they narrow the list of lenders, and applying to the wrong one first costs time you do not have.

Deadlines and selling on

The offer from your landlord has a deadline for accepting it and then completing, so the mortgage needs to be ready in time. Leaving it until the offer arrives is the most common reason a Right to Buy purchase gets squeezed.

If you sell within a set period after buying, you normally have to repay some or all of the discount, and if you sell within ten years the landlord may have the right to buy the home back first. Lenders know this and it is in the paperwork. Your solicitor will explain the detail.

What we would do

Find out the construction type and the price as early as possible, then check your income and credit file against the lenders that actually lend on that property. That way the mortgage is ready well before the landlord's deadline rather than being arranged in a rush.

Right to Buy mortgages, answered

Can I get a Right to Buy mortgage with no deposit?

Often, yes. Many lenders treat the discount as your deposit and will lend against the discounted price, so you may not need savings. You still have to pass the lender's affordability checks.

Do lenders lend on the discounted price or the market value?

Usually the discounted price. A few will consider more in specific circumstances, but you should plan on borrowing no more than the price in your landlord's offer.

Why would a lender refuse a former council house?

Usually because of how it was built. Some post-war homes use non-standard or defective construction that certain lenders will not accept. Other lenders will, so it narrows your choice rather than ending it.

I rent from Cross Keys Homes. Do I have the Right to Buy?

Possibly. Tenants who moved across when Peterborough's council homes were transferred may have a preserved Right to Buy, while later tenants may have the Right to Acquire instead. Cross Keys can confirm which applies to you.

What happens if I sell soon after buying?

You will normally have to repay some or all of the discount if you sell within a set period, and the landlord may have first refusal if you sell within ten years. Check the current terms with your landlord and solicitor.

When should I speak to a broker?

As soon as you have applied, and certainly once the offer arrives. The offer has a deadline, and the mortgage needs to be ready in time.