Right to Acquire scheme – The ultimate guide

Right to Acquire is a scheme available if you are a housing association tenant in England. The scheme gives tenants the right to purchase their home at a discounted price. To be eligible for the scheme, tenants must have had a public sector landlord for at least three years.

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January 30, 2023
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What is Right to Acquire

You could be eligible for a discount of up to £16,000, the amount of discount depends on where you live. The scheme is intended to help tenants become homeowners, and to provide a way for them to build equity in their home.

Right to Acquire

Right to Acquire is a government scheme which allows many Housing Association tenants in England to buy their rented home at a discounted price, provided you’ve rented from a public sector landlord for three or more years.

These include:

Housing associations
NHS trusts and foundation trusts
Councils
The armed services

You can get a discount of between £9,000 and £16,000, depending on where abouts in England you live. Your discount may be reduced if you’ve used either the Right to Acquire or Right to Buy schemes in the past.

You can see potential discounts by location here: https://www.gov.uk/government/publications/right-to-acquire-discounts-by-location/right-to-acquire-discounts-by-location

You cannot use Right to Acquire if:

you’re being made bankrupt
a court has ordered you to leave your home
you’re a council tenant – you may be able to use Right to Buy instead
you have ‘Preserved Right to Buy’

How does the right to acquire scheme work?

The Right to Acquire process is pretty straightforward. You must first fill out a Right to Acquire application form and send it to your landlord.

Your landlord must say yes or no within 4 weeks of getting your application (8 weeks if they’ve been your landlord for less than 3 years). If your landlord says no, they must say why. You cannot appeal against the landlord’s decision.

Once the purchase price and discount are agreed you have 12 weeks to tell the Landlord you want to proceed. If you think your landlord has set your home’s market value too high, you must write to them within 3 months of getting the offer and ask for an independent valuation.

Assuming you meet all the requirements, you would apply for a mortgage to cover the rest in the usual way. Most lenders will use the discount you are getting as a deposit, so you don’t need to use your own funds or save up. Some lenders may wish for a minimum 5% deposit to come from your own personal funds.

Our brokers at Clever Mortgages will be able to help with any questions and to arrange a mortgage for you

You can also visit the government website and use the Right to Acquire mortgage calculator which will give you a general idea of your eligibility.

If you sell your home within 10 years of buying it through Right to Acquire, you must first offer it back to your old landlord.

The property should be sold at the full market price agreed between you and the landlord.

If you cannot agree, a surveyor will say how much your home is worth and set the price. You do not have to pay for their valuation.

If the landlord does not agree to buy your home within 8 weeks, you can sell it to anyone.

Right to acquire housing association

The tenant will need to express their interest in purchasing their home to the housing association and will be provided with an application form and any additional information they need to complete it. The tenant will need to provide information such as their personal details, income and savings, and any other relevant information. They will also need to provide proof of their tenancy, such as a copy of their tenancy agreement.

The housing association will then assess the application to ensure the tenant meets the eligibility criteria and the property is eligible for the scheme, and will let the tenant know if they are eligible to proceed with the purchase.

It’s important to note that the process and requirements may vary depending on the specific housing association you are dealing with. It’s recommended to check with your housing association for the specific details of the Right to Acquire scheme as it applies to your tenancy.

We hope we have managed to answer most of your questions on the Right to Acquire Scheme.

If you have any questions, or would like to speak to a broker about help with a please call one of our Brokers for a chat and to answer any remaining questions.

Call: 0330 232 0285

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Paying back the discount on a right to acquire home

If you sell your home within 5 years of buying it, you’ll have to pay back some or all of the discount you got.

If you sell within the first year, you’ll have to pay back all of the discount. On top of this, the amount you pay back depends on the value of your home when you sell it. So, if you got a 10% discount, you’ll have to pay back 10% of the selling price.

If you sell after the first year, the total amount you pay back reduces. You pay back:

80% of the discount in the second year
60% of the discount in the third year
40% of the discount in the fourth year
20% of the discount in the fifth year

Example

You bought your home worth £100,000 and got a 10% discount (£10,000). You then sold your home after 18 months for £120,000.

10% of £120,000 is £12,000. As you’re in the second year, you would repay 80% of £12,000 (£9,600).

What properties are eligible for the right to acquire scheme?

Your property must either have been:

built or bought by a housing association after 31 March 1997 (and funded through a social housing grant provided by the Housing Corporation or local council)
transferred from a local council to a housing association after 31 March 1997
Your landlord must be registered with the Regulator of Social Housing.

The home you want to buy must also be:

a self-contained property
your only or main home

The Right to Acquire scheme is a UK government initiative that allows housing association tenants to purchase their properties at a discounted price. To be eligible for the scheme, the tenant must:

Be a secure tenant of a housing association
Have been a public sector tenant for at least 3 years
Not have a criminal record or owe money to the landlord
Not own any other property

The property must also meet certain criteria, such as being in a reasonable condition and not being subject to any legal agreements or restrictions.

Do I qualify for the right to acquire scheme?

To be eligible for the Right to Acquire scheme in the UK, you must meet the following criteria:

Be a secure tenant of a housing association
Have been a public sector tenant for at least 3 years
Built or bought by the housing association after 31 March 1997
Not have a criminal record or owe money to the landlord
Not own any other property
Meet certain income and savings criteria
The property must also meet certain criteria, such as being in a reasonable condition and not being subject to any legal agreements or restrictions.

From a personal perspective, you must be a housing association tenant. However, not all housing association tenants have this right.

The right to acquire scheme does not apply to housing co-operatives

It’s important to note that these criteria can vary depending on the specific housing association that manages your property, and you should check with them for the specific requirements.

It is also important to remember that just because you meet these general requirements, it doesn’t guarantee that you’ll be able to purchase your property through the Right to Acquire scheme. Each application is assessed on a case-by-case basis, and the housing association will take into account factors.

If I sell my property, do I need to pay back discount on the right to acquire scheme?

Yes, if you sell your property within a certain period of time after purchasing it through the Right to Acquire scheme, you may be required to pay back some or all of the discount you received. The exact length of time during which you must retain ownership of the property in order to avoid paying back the discount can vary depending on the housing association, but it is usually currently 5 years.

If you sell the property within this time period, you will be required to pay back a percentage of the discount you received, typically on a sliding scale based on how long you owned the property before selling it. If you retain ownership of the property for longer than the required period of time, you will not be required to pay back any of the discount.

If you sell after the first year, the total amount you pay back reduces. You pay back:

80% of the discount in the second year
60% of the discount in the third year
40% of the discount in the fourth year
20% of the discount in the fifth year

How do I apply for the right to acquire scheme?

To apply for the Right to Acquire scheme in the UK, you will need to contact your housing association and express your interest in purchasing your social housing property. They will then provide you with an application form and any additional information you need to complete it.

When filling out the application, you will be required to provide information such as your personal details, income and savings, and any other relevant information. You will also need to provide proof of your tenancy, such as a copy of your tenancy agreement.

You will also need to demonstrate that you meet the eligibility criteria for the scheme, such as having been a public sector tenant for at least 3 years and not owning any other property.

Once you have completed the application and provided all the necessary documentation, the housing association will assess your application and let you know if you are eligible for the scheme. If your application is successful, you will then be able to proceed with the purchase of your property at the discounted price.

It’s important to note that the process and requirements may vary depending on the specific housing association you are dealing with.

We hope we have managed to answer most of your questions on the Right to Acquire Scheme.

If you have any questions, or would like to speak to a broker about help with a please call one of our Brokers for a chat and to answer any remaining questions.

Call: 0330 232 0285

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Right to acquire mortgage

When purchasing a property through the Right to Acquire scheme, you will need to obtain a mortgage just like any other home purchase. However, there are a few things to keep in mind when applying for a mortgage under the Right to Acquire scheme:

The lender will take the discounted price of the property, not the full market value, as the basis for the mortgage.
You may not be required to provide a deposit, as the lender may use the discount you are receiving as your deposit.
You may find there are less options available than a traditional mortgage, but there are still plenty of options available.

It’s recommended that you speak with a mortgage broker such as Clever Mortgages, or lender to find out more about the mortgage options available to you under the Right to Acquire scheme. They will be able to advise you on the best mortgage products and lenders for your circumstances, and help you to understand the terms and conditions of the mortgage offer.

It’s important to know that the lender will still need to carry out the usual checks such as creditworthiness, income, and affordability, to ensure that you are able to repay the mortgage.

Should I use a mortgage broker for the right to acquire scheme?

Using a mortgage broker may be helpful when applying for the Right to Acquire scheme, as they can guide you through the process and help you find a mortgage lender that is willing to lend to you at the discounted price.

As all lenders don’t offer mortgages for the Right to Acquire scheme, a mortgage broker can look at all of those that do and save you time going to each lender individually to check.

A Clever Mortgages broker can help you by:

Explaining the different types of mortgages available, and which one may be suitable for you
Helping you to gather all the necessary documentation, such as proof of income and savings, to present to a lender
Shopping around to find you the best mortgage deal based on your circumstances
Helping you to understand the terms and conditions of the mortgage offer and answering any questions you may have
Helping you to complete the application process with the lender.

What discounts are available for the right to acquire scheme?

You can get a discount of between £9,000 and £16,000 on the price of your property.

The amount of discount you’ll get depends on where you live in the UK.

Your landlord will tell you what discount you’ll get when you apply to buy your home. You can also download a table of discounts, broken down by location.

Your discount might be reduced if you’ve used Right to Acquire or Right to Buy in the past.

Right to acquire discounts

You can get a discount of between £9,000 and £16,000 on the price of your property.

The amount of discount you’ll get depends on where you live in the UK.

Your landlord will tell you what discount you’ll get when you apply to buy your home. You can also download a table of discounts, broken down by location.

Your discount might be reduced if you’ve used Right to Acquire or Right to Buy in the past.

What is the difference between right to buy and right to acquire?

The Right to Buy and the Right to Acquire are both English Government schemes that allow certain tenants to purchase their social housing properties at a discounted price. However, there are some key differences between the two schemes:

Eligibility: The Right to Buy scheme is only open to tenants of local authority properties
Right to acquire is only open to tenants of housing association properties
Discounts: The discounts available under the Right to Buy scheme are generally higher than those available under the Right to Acquire scheme.
Selling the property: For both schemes, if you sell the property within 5 year you have to pay some or all of the discount back. Since with Right to Buy you can get a larger discount, you may end up paying more back compared to the Right to Acquire scheme which has a lower discount on the initial purchase.
Eligible properties: Right to Buy scheme is only eligible for properties that are owned by the local authority and are self-contained, while Right to Acquire scheme is eligible for properties that are owned by registered housing associations.

Both schemes have similar requirements regarding the condition of the property and tenant’s criminal record or outstanding debts. It’s recommended to check with your local authority or housing association to find out the specific details of the scheme that applies to you.

Right to acquire exemptions

Certain properties and tenants may be exempt from the Right to Acquire scheme in the UK. Exemptions can vary depending on the specific housing association that manages the property, but some common examples include:

Properties that are designated for specific groups of people, such as sheltered housing for the elderly or supported housing for people with disabilities

Properties that are subject to legal agreements or restrictions, such as those that are part of a housing regeneration project

Properties that are in poor condition and would require significant repairs before they could be sold
Tenants who have a criminal record or owe money to the landlord
Tenants who own another property

It’s important to check with your housing association to find out if there are any exemptions that apply to your specific property and tenancy. They will be able to provide you with more information and advise you on your options.

Karli O’Connor

Karli as part of our Front Line Team has helped many clients with their Mortgage Enquiries, Karli is now arranging and advising on the best options for clients.

Call Karli on: 0330 232 0285

Why use a mortgage broker?

Most of our customers have had some form of credit difficulties, from low credit score, missed payments or declined a mortgage elsewhere.

Valuable knowledge, through years of experience helping customers
Bad credit / poor credit experts
Find the right mortgage first time
Some mortgages are only available through a broker
Help with the application process
Advice on all options available, such as help to buy, guarantor or shared ownership

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