Right to Buy Mortgages in Leicester
Right to Buy Mortgages in Leicester
The discount works as your deposit
This is the point that makes Right to Buy work for people who could never save a conventional deposit.
If a property is valued at market value and you have a discount, most lenders will lend against the discounted purchase price while treating the discount as your equity. In practice that often means buying with little or no cash deposit of your own — you already hold equity from day one.
Affordability is assessed on the amount you are actually borrowing, which is the discounted price. That is why Right to Buy is achievable on incomes that would not support an open-market purchase of the same property.
Eligibility — check with your landlord first
Eligibility depends on the type of tenancy you hold and how long you have been a public sector tenant. The rules differ between council tenancies and housing association tenancies, and both the qualifying periods and the maximum discounts change over time.
Your landlord is the authority on this. Leicester City Council, or your housing association, will confirm whether you qualify and what discount applies. Get that in writing before doing anything else — the discount figure determines everything that follows.
Some properties are excluded, and some housing association tenants have a different scheme with different rules.
Houses and flats are treated differently
The single most important mortgage variable in a Right to Buy purchase is whether you live in a house or a flat.
Ex-local authority houses are generally straightforward. Standard construction, a garden, individual title. Most lenders that do Right to Buy will consider them without difficulty.
Ex-local authority flats and maisonettes are more restricted. Common lender conditions include:
Across Leicester, ex-council stock is spread through Braunstone, New Parks, Beaumont Leys, Eyres Monsell, Saffron Lane, Thurnby Lodge and elsewhere, and it includes both houses and blocks. If you are in a flat, tell us at the first conversation — it changes which lenders we approach.
Non-standard construction is the other thing to establish. Some post-war public housing used concrete or steel-framed systems, and certain types are declined by most lenders regardless of the discount.
- A minimum proportion of flats in the block being privately owned rather than tenanted
- Limits on the number of storeys in the block
- Refusal on deck-access or balcony-access blocks
- Requirements on lease length and service charges
Selling later, and repaying the discount
If you sell within a set period after buying, you will normally have to repay some or all of the discount, on a reducing scale over that period. Your landlord's offer notice sets out the exact terms.
There may also be a period during which you must offer the property back to your landlord before selling on the open market.
Neither is a reason not to buy. Both are reasons to be clear about your plans before you do, particularly if there is any chance you will need to move.
Preserved Right to Buy
Worth knowing about, because it applies to a lot of Leicester tenants and is easily missed.
If you were a council tenant and your home was later transferred to a housing association, you may hold a Preserved Right to Buy rather than the standard housing association scheme. It carries the terms of the original council entitlement, which are often more generous.
Whether it applies depends on the circumstances of the transfer and whether you have remained a tenant of the same landlord since. Your housing association will confirm which scheme you fall under.
The practical point: do not assume that being a housing association tenant means the less generous scheme applies to you. Ask specifically about Preserved Right to Buy, and get the answer in writing along with your discount figure.
Your rent history is useful evidence
A long record of rent paid on time is genuine evidence of affordability, and some lenders will take it into account, particularly where your credit file is thin. Bring a rent statement from your landlord to the first appointment.
If you have credit problems
Right to Buy applicants with defaults, CCJs or a patchy credit history are not shut out. The pool of lenders is smaller — fewer offer Right to Buy at all, and fewer still combine it with adverse credit — but specialist lenders do operate here, helped by the fact that the discount reduces their risk.
If this applies, see also our page on adverse credit mortgages in Leicester.
What it costs
Budget separately for a solicitor and, if you want one, a survey. The discount does not cover these.
Speak to a Leicester Right to Buy adviser
Get your offer notice from your landlord, then bring it to us. We will tell you what you can borrow and which lenders will consider your property.
Call 0116 277 7536 or book a free consultation.
Cedar House, 3 Broad Street, Enderby, Leicester, LE19 4AA.
Common questions
Can I use my Right to Buy discount as the deposit?
Yes, and most lenders accept it. The discount is treated as your equity in the property, so many Right to Buy purchases proceed with little or no cash deposit. Not every lender offers Right to Buy products, so the choice is narrower than the mainstream market.
Do I qualify for Right to Buy in Leicester?
Eligibility depends on your tenancy type and how long you have been a public sector tenant. Rules differ between council tenancies and housing association tenancies, and they change. Your landlord — Leicester City Council or your housing association — will confirm your eligibility and your discount figure.
How much can I borrow on a Right to Buy?
Lenders assess affordability on the discounted purchase price, not the full market value, which is why Right to Buy is often achievable on a modest income. Standard income multiples apply, and your existing rent payment history can help demonstrate you can meet the payments.
What happens if I sell within a few years?
You will usually have to repay some or all of the discount if you sell within a set period after purchase, on a reducing scale. Your landlord will confirm the exact terms in your offer notice. Factor this in if there is any chance you will move soon.
Can I get a Right to Buy mortgage with bad credit?
Often yes. Fewer lenders operate in this space, so options narrow, but specialist lenders will consider applicants with defaults or CCJs on a Right to Buy purchase. The discount acting as equity helps, because it reduces the lender's risk.
Is my flat eligible?
Flats can be bought under Right to Buy, but mortgage lending on ex-local authority flats is more restrictive than on houses. Lenders look at the number of storeys, whether the block is deck or balcony access, and the proportion of privately owned flats. Check before committing.
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