Right to Buy Mortgages (2026): How They Work After the Reforms
Your Right to Buy discount can act as your entire deposit — so you may need no cash deposit at all. But not every lender offers these mortgages, and the scheme has just been through its biggest shake-up in 45 years. Here’s how Right to Buy mortgages work now, and how to get one.
Quick Answer
A Right to Buy mortgage lets you buy your council or housing association home using your Right to Buy discount as the deposit — so in many cases you need no cash deposit at all. Lenders treat the discount as your equity: if your home is worth £200,000 and you get a £38,000 discount, you buy for £162,000 and only need a mortgage for that amount, with the discount covering the deposit the lender would normally want.
The essentials: not all lenders offer Right to Buy mortgages — it’s a specialist pool — and they lend against the discounted purchase price. You still pass normal affordability and credit checks, though adverse credit is workable with the right lender. Note the scheme has changed significantly: as of 21 November 2024, maximum cash discounts were cut to £16,000–£38,000 by region, and further reforms announced in April 2026 (longer eligibility, a new discount formula) are pending legislation. Your home may be repossessed if you do not keep up repayments on your mortgage.
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What Is a Right to Buy Mortgage?
Right to Buy is the long-running government scheme that lets eligible council (and some housing association) tenants in England buy their home at a discount. A Right to Buy mortgage is simply a mortgage designed for that purchase — and the defining feature is how the discount is treated.
When you buy through Right to Buy, the lender lends against the discounted price, not the full market value, and treats your discount as equity in the property. That’s what makes these mortgages special: the discount does the job a cash deposit normally would. For tenants who’ve never been able to save a deposit, it’s often the single most realistic route to owning their home — which is exactly why it’s worth understanding how the mortgage side works.
The Discount As Your Deposit — Often No Cash Needed
This is the heart of Right to Buy, and the reason it’s so powerful:
How the discount replaces a deposit — worked example
Your council home is valued at £200,000. You qualify for a £38,000 discount. You buy it for £162,000. A lender offering a Right to Buy mortgage treats that £38,000 discount as your deposit — roughly 19% equity — so you borrow the £162,000 and need no cash deposit of your own. In lender terms, you’re effectively borrowing at around 81% loan-to-value against the full value, but only paying for the discounted price.
This is why searches for a “Right to Buy mortgage with no deposit” make sense — the scheme genuinely can require zero cash upfront, unlike almost every other route onto the ladder (see our guide to no-deposit mortgages for the wider picture). You’ll still need money for fees (valuation, legal, and any broker fee), so it’s not entirely cost-free, but not needing a deposit is transformative. If you want a bigger equity cushion or to borrow less, you can add some cash savings or a gifted deposit on top of the discount.
The 2024–2026 Reforms — What’s Changed
Right to Buy is going through the most significant reforms in its history, so it’s vital to work from current facts. Here’s where things stand (as of 2026 — confirm current, as more change is coming):
| Change | Status |
|---|---|
| Maximum cash discount cut to £16,000–£38,000 by region (from £102,400 outside London / £136,400 in London) | In force since 21 Nov 2024 |
| Cost-floor protection extended from 15 to 30 years | In force |
| Minimum eligibility rising from 3 years to 10 years as a tenant | Announced Apr 2026 — pending legislation |
| New discount formula: start at 5%, +1% per year, max 15% of value (or cash cap, whichever lower) | Announced Apr 2026 — pending |
| Newly built social homes exempt for 35 years | Announced Apr 2026 — pending |
| Discount-repayment window on resale doubled from 5 to 10 years | Announced Apr 2026 — pending |
The window that matters right now
As of mid-2026, the old eligibility rules still apply until the new legislation passes — so today a tenant can generally still qualify after 3 years (not the proposed 10), but under the already-reduced cash discount caps of £16,000–£38,000. Because the announced reforms would tighten eligibility considerably, tenants who are already eligible and considering buying may not want to wait indefinitely. This is genuinely time-sensitive, and exactly the kind of thing to check now with your council and a broker — the discount you’re quoted, and the rules you fall under, depend on when your application is received.
Which Lenders Offer Right to Buy Mortgages?
A key practical point: not every lender offers Right to Buy mortgages. It’s a specialist area, and lenders that do it need to be comfortable with the discount-as-deposit structure and the resale rules. Several high-street names and building societies participate, alongside specialist lenders, but the pool is narrower than for standard mortgages.
Why a broker matters more here
Because the lender pool is limited and each has its own criteria — some cap the loan-to-value against full market value, some have minimum property values or exclude certain flats, some are more generous on affordability — matching yourself to the right one is harder than for an ordinary mortgage. A broker who handles Right to Buy cases knows which banks currently offer these mortgages, which will accept your property type, and which suit your income and credit profile. Applying blindly to a lender that doesn’t do Right to Buy (or won’t accept your circumstances) wastes time and can dent your credit file with an unnecessary decline.
Right to Buy With Bad Credit
A reassuring reality: Right to Buy is often achievable even if your credit isn’t perfect. Many Right to Buy applicants have some adverse credit history, and specialist lenders exist who combine Right to Buy with a flexible view on credit. The built-in discount actually helps here — because you’re effectively borrowing at a lower loan-to-value against the property’s full value, the lender has a bigger equity cushion, which can make them more comfortable with a less-than-perfect credit file.
That said, adverse credit — defaults, CCJs or missed payments — still narrows your lender options and may affect your rate, so the age, size and type of any credit issues matter (just as they do for any adverse-credit mortgage). The combination of “Right to Buy” and “bad credit” is a genuine specialism, so it’s worth working with a broker who understands both rather than assuming a high-street bank will say yes.
Affordability and Joint Applications
Even though the discount covers your deposit, you still need to prove you can afford the mortgage. The good news is that affordability is assessed against the discounted loan amount, which is smaller than the property’s market value — so the bar is lower than buying the same home at full price. Lenders apply their normal income multiples (typically 4–4.5× income) to work out what you can borrow.
If your income alone isn’t quite enough, joint applications can help significantly. Right to Buy lets you apply jointly with anyone who shares your tenancy, and you can include up to three family members who’ve lived with you for at least the past 12 months — even if they’re not on the tenancy. Adding their income can lift your borrowing power, similar in spirit to a guarantor or joint arrangement. It’s a genuinely useful lever for households where one income wouldn’t stretch far enough.
The Resale Repayment Rule — Know Before You Buy
One important condition to understand before committing: if you sell your home within the first few years of buying it through Right to Buy, you’ll have to repay some or all of the discount. Currently this repayment window is 5 years (reducing on a sliding scale — you repay a smaller proportion each year), but one of the announced reforms would double it to 10 years. Your council also holds a right of first refusal if you sell, meaning you must offer it back to them first (the reforms propose extending this indefinitely).
None of this is a reason not to buy — for most people Right to Buy remains an excellent deal — but it does mean Right to Buy suits those planning to stay put for the medium-to-long term rather than buy and quickly sell. Factor the repayment window into your plans, and once you’re past it, you can usually remortgage freely to a better deal as your equity grows.
The bottom line
A Right to Buy mortgage turns your discount into your deposit, so you can often buy your council home with no cash deposit at all — genuinely one of the most accessible routes to ownership. Lenders lend against the discounted price, affordability is assessed on that smaller amount, and joint applications (up to three family members) can boost what you borrow. Two things to get right: use a lender that actually offers Right to Buy (a specialist pool — and adverse credit is workable), and understand the reforms — discounts were cut to £16,000–£38,000 in November 2024, and tighter eligibility is coming, so if you’re already eligible it may pay to act rather than wait. Mind the resale repayment window, and you’ve got a powerful path onto the ladder.
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Frequently Asked Questions
How does a Right to Buy mortgage work?
A Right to Buy mortgage lets you buy your council or housing association home using your Right to Buy discount as the deposit. The lender lends against the discounted purchase price, not the full market value, and treats the discount as your equity in the property. For example, on a £200,000 home with a £38,000 discount, you buy for £162,000 and the discount covers the deposit — so you often need no cash deposit. You still pass normal affordability and credit checks, and only a specialist pool of lenders offers these mortgages.
Can I get a Right to Buy mortgage with no deposit?
Yes, in many cases. Because your Right to Buy discount acts as the deposit, you frequently don’t need to put down any cash of your own — the discount provides the equity the lender wants to see. This makes Right to Buy one of the few genuine no-cash-deposit routes to ownership. You’ll still need money for fees such as valuation, legal costs and any broker fee, and you can add your own savings or a gifted deposit on top if you want to borrow less, but a cash deposit itself is usually not required.
Which lenders offer Right to Buy mortgages?
Not all lenders offer Right to Buy mortgages — it’s a specialist area. Several high-street banks and building societies participate, alongside specialist lenders, but the pool is narrower than for standard mortgages because lenders must be comfortable with the discount-as-deposit structure and the scheme’s resale rules. Each has its own criteria on loan-to-value, property type and affordability. Because of this, a broker who handles Right to Buy cases is valuable — they know which banks currently offer these mortgages and which will accept your property and circumstances.
Can I get a Right to Buy mortgage with bad credit?
Often yes. Many Right to Buy applicants have some adverse credit, and specialist lenders exist who combine Right to Buy with a flexible view on credit. The built-in discount helps, because you’re effectively borrowing at a lower loan-to-value against the full property value, giving the lender a bigger equity cushion. However, defaults, CCJs or missed payments still narrow your options and may affect your rate, with the age, size and type of the credit issues mattering. Working with a broker who understands both Right to Buy and adverse credit is the best approach.
How much is the Right to Buy discount in 2026?
Since 21 November 2024, the maximum cash discount was cut to between £16,000 and £38,000 depending on the region (higher in some high-value areas), down from the previous caps of £102,400 outside London and £136,400 in London. Further reforms announced in April 2026 propose a new formula — discounts starting at 5% of the property value and rising 1% a year to a maximum of 15% — plus longer eligibility, but these are pending legislation. The exact discount depends on how long you’ve been a tenant and your property, so confirm the current position with your council.
Do I have to repay the discount if I sell?
If you sell within the first few years of buying through Right to Buy, you must repay some or all of the discount. Currently this window is 5 years, on a sliding scale where you repay a smaller proportion each year, though an announced reform would double it to 10 years. Your council also has a right of first refusal, meaning you must offer the property back to them first. This makes Right to Buy best suited to people planning to stay medium-to-long term. Once past the repayment window, you can usually remortgage freely.
- GOV.UK — Right to Buy: buying your council home, discounts and eligibility
- GOV.UK / MHCLG — Right to Buy overhaul to safeguard social housing (2026 reforms)
- Local authority Right to Buy policies — discount rules and cost floor
- Specialist lender criteria on Right to Buy mortgages, LTV and affordability — indicative and subject to change
Important information
nextmove is an introducer, not a lender or adviser. This article is for general information only and does not constitute financial or legal advice. Right to Buy eligibility, discount levels, scheme rules and lender criteria are indicative, changing significantly through 2024–2026 reforms, vary by region and circumstances, and should be confirmed as current with your local authority and an adviser before you rely on them. Some reforms described are announced but pending legislation. We introduce you to FCA-regulated mortgage brokers who can advise on your individual circumstances, including specialist Right to Buy and adverse-credit lenders, and we may receive a fee or commission for doing so.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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