For most first-time buyers, the most difficult and daunting part of the process is arranging a mortgage. This can be particularly true for those who are also struggling with a poor credit history, or perhaps limited income.
Considering both eligibility and affordability before applying for a mortgage is essential. This means establishing a realistic budget, using an online mortgage calculator to get an idea of what’s on offer and consulting with an independent broker.
There are few instances in which it is advisable to take your case directly to a lender. By applying through an established broker, your requirements can be matched with your ideal mortgage from dozens of competing providers. In addition, a broker can provide all the advice and support you need on the additional one-off costs that accompany mortgage loans.
Key Points to Consider
Prior to submitting or finalising a Right to Buy mortgage application, it’s important to consider the following:
- To what extent will you be required to provide a deposit? Do you have sufficient funds available? Would you be better suited to a deal with a lower deposit?
- Do you fully understand all of the additional borrowing costs and one-off fees attached to the mortgage?
- Are you sure that the broker or lender you are consulting with is giving you 100% honest and impartial information? Could they simply be promoting specific products to make a profit?
- Is there a possibility your credit history or financial status could affect your eligibility?
- Do you have all the documentation you will need to submit your application?
- Have you allowed ample time for your application to be processed, or do you need your application to be fast-tracked?
Consulting with an independent specialist is the most effective way of addressing all of the above considerations and more. Rather than going it alone, it pays to have a professional support behind you, throughout the mortgage application process.
For more information or to discuss your requirements in more detail, contact a member of the team at UK Property Finance today.
Right to Buy is an affordable housing scheme open exclusively to council property tenants (and some housing association tenants). Qualifying tenants upon meeting specified length-of-tenancy requirements are automatically given the right to purchase their home, with discounts available of up to £82,800, increasing to £110,500 for qualifying properties in London.
Lower discounts of £24,000 and £8,000 are available in Northern Ireland and Wales respectively.
The UK government introduced the Right to Buy scheme to help public-sector tenants purchase their homes with potentially huge discounts from their actual market value. Right to Buy was introduced by the UK Government in 1980, though initial property discounts were relatively low - up to £16,000 maximum. Discount amounts were subsequently increased on an annual basis to reflect inflation and are now significantly more generous, opening the door to potential home ownership for more tenants than ever before.
It is already possible to qualify under the Right to Buy scheme to purchase a housing association property. However, there are specific terms and conditions governing the program. Tenants occupying ex-council houses who lived in the property at the time it was transferred to a new landlord have what’s known as ‘Preserved Right to Buy’.
Otherwise, Right to Buy may qualify under a secondary ‘Right to Acquire’ scheme, for which discounts of £9,000 up to £16,000 are available. Contact your landlord or local housing association for more information.
There is an eligibility quiz on the official government Right to Buy portal. Check that out and answer a few simple questions to determine whether you may be eligible for an enormous discount on your home’s current market value.
Housing Association Tenants - Recent changes have affected eligibility for the Right to Buy scheme for occupants of housing association properties. Find out more and determine how much you could save by purchasing your home through Right to Buy.
UK Property Finance has extensive experience and expertise in all aspects of Right to Buy applications for council and housing association tenants alike.
If you purchase your property under the Right to Buy, you are perfectly entitled to let it out to tenants. However, you must inform your local council of your new address - i.e. where you will live while renting out your property.
Upon receipt of your application to purchase your property under the Right to Buy, your landlord is typically obliged to reply with a decision within four weeks. This is sometimes increased to eight weeks, depending on your length of residency in the property. A complete offer notification including the value of the property, the discount you are eligible for and the resulting purchase price for your home will be sent within no more than 8 weeks for a house, or 12 weeks for a leasehold property.
If you choose to go ahead, it will then be your responsibility to organise a mortgage and the general administrative/legal side of the purchase process. From start to finish, it typically takes at least 3 to 6 months to purchase a property under Right to Buy, although it can be quicker.
Not necessarily, as many lenders accept the discount on the property’s value as the deposit. Depending on the lender, you may therefore not need to provide any deposit. Nevertheless, this is determined on a case by case basis. In some instances, your deposit obligations will be exactly the same as if you were purchasing a property through the normal channels.
Right to Buy mortgage lenders in the UK require deposits of anything from 0% up to 20%, which must be paid before the mortgage completes. If you have concerns as to your ability to cover the necessary mortgage, contact a member of the team at UK Property Finance to discuss the alternative options.
The typical maximum discount available on a property in England is £82,800, increasing to £110,500 for qualifying properties in London. It is also possible to qualify for a discount under the Right to Buy scheme in Northern Ireland and Wales, where the maximum discounts available are £24,000 and £8,000 respectively.
Anyone interested in purchasing a property outside England should consult with the relevant government website using the links below:
Possibly however the deposit you need to pay will be determined entirely by the size and nature of the mortgage you need to pay for your home. There are various different types of mortgages available, along with alternative secured lending options and general property finance packages. To discuss the available options and assess your suitability, contact a member of the team at UK Property Finance anytime.
Stamp duty is payable on all properties in the United Kingdom, including those purchased under the Right to Buy scheme. Stamp duty is only payable when purchasing a property with a value in excess of £125,000. Most property purchases are subject to the usual 3% stamp duty, which is payable at the time of the property purchase by the individual (or individuals) buying the home.
The maximum discount currently available under the Right to Buy scheme in England is £82,800, increasing to £110,500 for qualifying properties in London. Discount amounts are revised and updated every April, in line with inflation,
For more information on any of the above issues or to discuss your eligibility for a Right to Buy discount in more detail, contact a member of the team at UK Property Finance today.