Right To Buy Mortgages

Right to Buy Mortgage Discounts

Of course, the factor that makes the right to buy scheme particularly attractive for council tenants is the availability of the discounts that are offered to those looking to purchase their property. Depending on various issues such as the type of property, location and length of time that the tenant has lived in the property, discounts of between £16,000 and £38,000 are currently available.

What Determines the Maximum Level of Discount
The maximum level of discount is determined by the geographical location of the property. Across the South East, the maximum level is the full £38,000 unless the property is located in: Chiltern, Epsom, Hart, Oxford, Reading, Reigate, Tonbridge, Vale of the White Horse or West Berkshire, in which case the maximum is only £16,000.

Other current maximum discounts are:
£34,000 in the Eastern regions, except for in Watford where the maximum is £16,000;
£30,000 in the South Western regions;
£26,000 in the North Western and West Midlands regions;
£24,000 in the East Midlands, Yorkshire and Humberside regions;
£22,000 in the North Eastern regions; and
£16,000 in Wales and London, with the exception of Barking and Dagenham where the maximum is £38,000.

Calculating Actual Discount
No discount level will be higher than the figures mentioned above. Therefore, subject to these limits, a council tenant will receive a discount based on the type of property and the length of time the tenant has been in the property. Once the qualifying period has been achieved, which is 2 years for tenancies beginning before 18 January 2005 and 5 years for tenancies on or after this date, a percentage discount on the value of the property is available.

For a house, the discount is 32 percent with an additional 1 percent available for every further year spent in the property, up to a maximum of 60 percent. For a flat, the discount level is 44 percent, with an additional 2 percent available for every year in the property up to a maximum of 70 percent.

In Northern Ireland, after 5 years, a discount of 20 percent is available is with an additional 2 percent per year. The maximum level of discount is £24,000.

Summary
Discount is calculated as a percentage of the property value based on how many years the tenant has lived in the property and whether the property is a house or flat; and
the value of the discount is subject to a regional maximum.